Net inflow of capital for the first time in three months, with foreign investment buying a net of $3.11 billion in Asian bonds in August.

In August, Asian bonds saw the first monthly net inflow of foreign funds in three months. The attractiveness of high-yielding emerging market assets in Asia has significantly increased, as the market anticipates the Federal Reserve will support the cooling labor market through rate cuts, driving foreign funds back into the Asian bond market. Data from regulatory agencies and bond market associations in countries such as India, Indonesia, Thailand, Malaysia, and Korea showed that foreign investors bought a net value of $311 million Asian bonds last month, marking the first monthly net inflow since May. The Federal Reserve announced a rate cut on Wednesday, the first since December last year. The Fed stated that the rate cut was due to increasing risks in the labor market, along with a slight rise in unemployment rate, shortened work hours, and other weak signals, hinting at further rate cuts in the future. Khoon Goh, Head of Asia Research at ANZ, stated, "We expect the Fed to cut rates by a total of 125 basis points, and by March 2026, the federal funds rate will drop to 3.25%." He further added, "The loose monetary policy stance in the US will provide support to currencies and asset markets in the Asian region, excluding China." In specific markets, foreign investors bought a net value of $773 million Indian bonds and $721 million Malaysian bonds last month, ending two consecutive months of selling trends in these two markets. However, there were net outflows of foreign funds in Korean, Indonesian, and Thai bonds, with amounts of $447 million, $400 million, and $337 million respectively.