Han Ya Investment stated that Asian bond yields are at multi-year highs, providing investors with attractive and stable sources of income. According to historical data, when the yields on investment grade Asian bonds are above 5%, these bonds have a probability of over 80% of achieving positive total returns within 12 months. The favorable macroeconomic environment of moderate growth and mild inflation in Asia benefits Asian bonds. With the pricing in Asian markets largely reflecting rate cuts already, Asian bonds may benefit more when central banks eventually lower rates. Compared to investment grade bonds in the US and Europe, Asian investment grade bond yields are competitive, and the higher yields per unit of duration offer a more attractive balance between returns and risks for investors. Han Ya Investment pointed out that there has been a significant shift in mainstream views in the bond market since the beginning of this year. Initially focused on the "Fed policy turnaround," with expectations of multiple rate cuts until 2024, the current focus has shifted to a position of "long-term high interest rates." Market expectations for Fed rate cuts have decreased from an initial projection of 150 basis points in 2024 to only 47 basis points for the remainder of the year. Signs of persistently higher-than-expected inflation data and the continued strength of the US economy have led to this shift, causing bond yields across different maturities to rise. Han Ya Investment believes that the moderate growth and mild inflation in the macroeconomic environment also favor Asian bonds. Driven by healthy external demand, trade-dependent Asian economies like South Korea, Taiwan, Malaysia, Singapore, and others are developing in sync with other Asian economies benefiting from strong domestic demand. Over the past three months, Asia's real exports have accelerated, reaching a new high since 2021. Improved global new orders-to-inventory ratios suggest that external demand will remain strong this year. The recovery in capital expenditure cycles in developed markets is likely to support Asia's exports. In addition, with the normalization of domestic demand and the completion of the transmission process of rising input costs within the economy, inflation in most regions of Asia (excluding China) has already slowed down. Although inflation is under control, Asian central banks are not in a rush to cut rates, as rate cuts may have potential implications for their domestic currencies while the Fed keeps rates unchanged. With interest rate differentials significantly narrowed and Asian high-yield bonds performing strongly since the beginning of the year, Han Ya Investment prefers Asian investment grade bonds. Given the ongoing geopolitical tensions, high bond yields can enhance bond returns and offset potential losses in the current environment. Han Ya Investment stated that in the short term, the net supply of Asian investment grade bonds denominated in US dollars is expected to be negative in 2024, benefiting bond prices. In the long term, the aging populations and structural current account surpluses in multiple Asian economies provide support for bond demand. The increasing stable demand from long-term investors in Asia is expected to make Asian bond returns more stable. With credit spreads narrowing and the uncertainty of the Fed's policy timetable, carry trades will become an important driver of bond returns in the medium term. Han Ya Investment is bullish on Asian investment grade bonds and believes that investors can secure high-quality returns at the current yields, while also benefiting from the advantages of diversified investments.