How Economic and Financial Indicators Shape Bond Market Performance in Asia?

The focus of this study is to examine the effects of macroeconomic and financial indicators on bond market performance in Asia countries. This study utilizes a regression analysis to measure the relationship between inflation, interest rate, stock market performance, and gold price in six selected nations: India, Indonesia, China, Vietnam, South Korea, and Turkey, from 2014 until 2024. The validity of the data was diagnostically checked by performing a VIF procedure, autocorrelation test, and normality test on residuals, and the data were analysed via EViews software. The analysis showed mixed findings; however, two major variables that negatively affects the performance of bond markets in Asia are the “inflation and stock market,” which reflects global economic stability in the selected countries. An abrupt or sudden rise in the lending interest rate can trigger market volatility, leading to losses for bondholders and potentially discouraging corporate investment (Alam & Uddin, 2009). Moreover, the monetary policy stances adopted by central banks have systemically important ramifications for the valuation of both bond and equity markets on a global scale (Jang & Atukeren, 2019). For practical implications, this study suggests that policymakers pay extra attention to inflation to ensure a sustainable economic condition. To the best of the authors’ knowledge, this study is the first to examine the combination of both economic and financial shocks, along with gold price, both pre-and-post COVID-19 pandemic, focusing on Asia.