Bond Risk in Australia, Japan Rises, Credit-Default Swaps Show

The cost of insuring corporate bonds in Australia and Japan from non-payment rose, according to traders of credit-default swaps.

The Markit iTraxx Australia index climbed 4 basis points to 152 as of 10:33 a.m. in Sydney, according to National Australia Bank Ltd. The benchmark rose for the first time in three days yesterday to 151 basis points, according to data provider CMA. A basis point is 0.01 percentage point.

The Markit iTraxx Japan index increased 2 basis points to 202.5 as of 9:16 a.m. in Tokyo, Deutsche Bank AG prices show. The index also advanced yesterday after dropping 12 basis points on Sept. 7, its biggest one-day decline since Oct. 28, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan was little changed at 132.5 basis points as of 8:34 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The gauge fell for a fifth consecutive day yesterday, CMA prices show.

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.

To contact the reporter on this story: Yusuke Miyazawa in Tokyo at

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.