Global corporate bond yield premiums have reached their highest levels since May 2025, according to Bloomberg data. Investors are moving toward safer assets, such as US government bonds, due to concerns over debt-funded artificial intelligence spending and geopolitical tensions.
In Asia, credit-default swaps widened by approximately 1.5 basis points to 78. Spreads on higher-rated Asian dollar bonds hit their widest point since July 2025. Chinese technology debt spreads widened by 3 to 5 basis points, while Indian and Korean investment-grade spreads increased by up to 3 basis points.
Stock markets across the region faced significant declines. Japan’s Nikkei 225 dropped 1.72% to 61,825.26, and South Korea’s KOSPI fell 1.97% to 5,424.96. China’s CSI 300 index declined by 0.70% to 4,008.12, having previously hit a 52-week low of 3,958.14.
Market participants are concerned that debt-fueled AI infrastructure spending may not generate sufficient profits. Analysts note that CoreWeave bond yields have surpassed 15%. This current market volatility is being compared to the credit spread widening observed in April 2025, which was triggered by US import tariffs.
