Asian Bond Curves Set to Steepen More as Trade War Rages on (1)

Asian bond curves face the risk of steepening further as bets on monetary easing to soften the tariff blow drag down short-end yields, while long-term rates track Treasury yields higher.

The yield spread between Thailand’s two- and 10-year bonds is at the widest since September, following a rise of more than 10 basis points since President Donald Trump announced reciprocal tariffs on April 2. A similar trend is also sweeping across bond markets India, South Korea and the Philippines.

“Bond curves in emerging Asia could steepen further, with front-end yields anchored by rate expectations to support growth and mitigate the ...