Journal of Finance and Economics

Journal of Finance and Economics

ISSN: 2291-4951 (Print)    ISSN: 2291-496X (Online)

Volume 5 (2017), No. 2, Pages 39-45

DOI: 10.12735/jfe.v5n2p39

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Impacts of US Monetary Normalisation on Corporate Bond Market in Emerging Asia

David Leung1  Alfred Wong1  Calvin Ng2 

1Research Department, Hong Kong Monetary Authority, Hong Kong
2Monetary Management Department, Hong Kong Monetary Authority, Hong Kong

URL: http://dx.doi.org/10.12735/jfe.v5n2p39

To Cite this Article     Article Views: 69     Downloads: 62  Since deposited on 2017-08-07

Abstract

This paper studies the potential impacts of US monetary normalisation on the emerging Asian corporate bond market, which has experienced explosive growth in recent years and become a crucial source of financing for the regional corporate sector. After controlling for global and economy-specific variables, we find that increase in US Treasury yields has the effects of reducing issuance, though only moderately, and shortening tenor in the corporate bond markets in emerging Asia. While no direct impact of US Treasury on corporate bond pricing is found, there is likely to be an indirect impact through domestic sovereign bond yields, in light of the significant pass-through from domestic sovereign to corporate bond yields, as well as evidence found on the pass-through from US Treasury yields to sovereign yields in the region in previous studies.

JEL Classifications: G12, G15, G30

Keywords: corporate bonds, unconventional monetary policy, emerging Asia, bond issuance, bond tenor, bond pricing

To Cite this Article: Leung, D., Wong, A., & Ng, C. (2017). Impacts of US monetary normalisation on corporate bond market in emerging Asia. Journal of Finance and Economics, 5(2), 39-45. http://dx.doi.org/10.12735/jfe.v5n2p39

Copyright © David Leung et al.

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This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.

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Impacts of US Monetary Normalisation on Corporate Bond Market in Emerging Asia
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