Bond Risk Decreases in Asia-Pacific ex-Japan, Default Swaps Show

The cost of insuring corporate and sovereign bonds from non-payment decreased in the Asia-Pacific region outside Japan, according to credit-default swap traders.

The Markit iTraxx Australia index slid 0.5 of a basis point to 113 basis points as of 10:25 a.m. in Sydney, according to Deutsche Bank AG. The gauge is on course for its lowest close since April 12, according to data provider CMA.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan declined 1 basis point to 112.5 as of 8:42 a.m. in Hong Kong, Royal Bank of Scotland Group Plc (RBS) prices show. The benchmark has fallen 9.8 basis points this month, according to RBS and CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.

The Markit iTraxx Japan index rose 0.5 of a basis point to 92 basis points as of 9:25 a.m. in Tokyo, Deutsche Bank prices show. The measure has fallen 21 basis points this month, according to Deutsche Bank and CMA prices.

Credit-default swap indexes are benchmarks for insuring 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: Rachel Evans in Hong Kong at

To contact the editor responsible for this story: Katrina Nicholas 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.