Bond Demand Evaporates in Taiwan as Inflation Risks Mount

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Taiwan's government bonds are falling out of favor as traders fear stubborn inflation may pressure policymakers to hike interest rates. The yield on Taiwan's benchmark 10-year notes has risen 46 basis points this year, with a spike in March as the central bank unexpectedly raised borrowing costs. The bid-to-cover ratio for last week's 10-year bond auction was at 1.17, the lowest since Bloomberg started tracking the data in 2000. Taiwan's bonds face particular pressure under a resilient economy, with a blowout exports figure and higher electricity rates as key inflation risks. The global rush for AI technology has been a boon for Taiwan, with last month's exports surging nearly 19%. The economy is expected to expand 3.2% this year. Concerns are that inflation may rise with the electricity price increase and strong consumer demand. Taiwanese bonds are at an unfavorable position compared to most Asian central bank peers, which are still expected to lower rates later this year.

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https://finance.yahoo.com/news/bond-demand-evaporates-taiwan-inflation-093237347.html