Asia-Pacific Bond Risk Rises, Credit-Default Swap Prices Show

The cost of protecting Asia-Pacific corporate and sovereign bonds from default increased, according to traders of credit-default swaps.

The Markit iTraxx Japan index jumped four basis points to 183 basis points as of 9:40 a.m. in Tokyo, according to Citigroup Inc. The gauge is set for its highest close since Jan. 18 and its sixth consecutive daily rise, according to data provider CMA.

The Markit iTraxx Australia index climbed five basis points to 160.5 basis points as of 10:35 a.m. in Sydney, Westpac Banking Corp. (WBC) prices show. The measure is headed for its sixth straight weekly rise with a 1.1 basis point increase, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan increased three basis points to 167 as of 8:40 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The benchmark has traded in a 132.5 to 209 range this year, according to CMA.

Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.

The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements. A basis point is 0.01 percentage point.

To contact the reporter on this story: Rachel Evans in Hong Kong at

To contact the editor responsible for this story: Shelley Smith at

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