Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/340549 
Year of Publication: 
2024
Citation: 
[Journal:] Borsa İstanbul Review [ISSN:] 2214-8469 [Volume:] 24 [Issue:] 6 [Year:] 2024 [Pages:] 1402-1413
Publisher: 
Elsevier, Amsterdam
Abstract: 
Against the backdrop of the Russia-Ukraine (R-U) conflict, this paper investigates the convergence process of the bond market in East Asia from 2010 to 2024, focusing on the impact of the R-U crisis on bond yield convergence. Our findings show convergence toward both benchmarks, with an accelerated rate during the conflict. Malaysia, China, Indonesia, and the Philippines exhibit significant convergence toward Japan, particularly for long-term bonds, while the Philippines consistently converges toward the United States. Large discrepancies in interest rates and inflation spreads cause bond yield divergence, while geopolitical risk related to Russia narrows bond yield spreads, indicating a flight-to-quality effect. Conversely, global financial risk widens yield spreads to the U.S. benchmark but narrows them to Japan. This research highlights bond market convergence in East Asia amid geopolitical tensions, with significant implications for investors, policymakers, and researchers.
Subjects: 
Asia
Beta convergence
Financial integration
Geopolitical risk
Government bond
Russia-Ukraine conflict
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article
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