Asian investors eye safety in US dollar assets

October 16, 2025

Asia-based investors are stepping up their allocation to US debt markets, highlighting the region’s sustained appetite for diversification and yield enhancement, according to LSEG Data & Analytics.

Conversations with market participants reveal a strong inclination to invest in US treasuries, securitised products and syndicated bank loans, it said. These instruments offer an attractive balance between returns and risk, particularly in a period of global economic uncertainty.

LSEG Pricing Service supports this investment activity by providing independent and transparent evaluated pricing across global debt markets, enabling greater investor agility and regulatory compliance.

The US dollar continues to be viewed as a strategic asset by Asian investors. Alongside dollar-denominated holdings, there is growing interest in high-quality non-USD credit, including Australian and Danish asset-backed securities. Many investors are turning towards Kung Fu bonds, Asset-Backed Securities (ABS) and syndicated loans, seeking opportunities abroad without significantly increasing their credit exposure.

Investment activity remains diverse, spanning traditional government bonds to alternative assets like structured products. Within the wealth and retail space, structured notes such as equity-linked instruments have seen a sharp rise. In 2024 alone, over 93,000 non-flow structured products were issued across five major APAC markets, generating an estimated $226.5bn in sales — a 21% year-on-year surge, LSEG stated.

The latest wave of US trade tariffs has added another layer of complexity. With 25% tariffs now applied to steel, aluminium and other key imports from major trading partners, Asia’s export-driven economies face potential slowdowns. Many emerging Asian countries, heavily reliant on trade surpluses with the US, are now bracing for lower domestic economic activity in 2025. As a result, investors are hedging their exposure through US treasuries, securitised assets such as ABS and MBS, and foreign alternatives like AUD RMBS and Danish MBS.

Ensuring quality and accuracy in asset pricing has become critical. LSEG Pricing Service offers evaluated pricing on over three million fixed income securities, derivatives and bank loans worldwide. This includes comprehensive coverage of ABS, CMOs, RMBS, CMBS, CLOs and CDOs — providing the market transparency and consistency that global investors increasingly demand.

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