Global Corporate Bond Yield Premiums Hit Highest Since May 2025 Amid AI Debt Concerns

Global corporate bond yield premiums have climbed to their highest since May 2025, driven by worries over debt-funded artificial intelligence (AI) spending and rising geopolitical tension. In Asia, higher-rated Asian dollar bond spreads reached their widest since last July, coinciding with declines in major stock indexes like Japan's Nikkei 225 (-1.72%), South Korea's KOSPI (-1.97%), and China's CSI 300 (-0.70%). Investors sought safety in US government bonds, where Treasuries rallied for their best day in over two years. This pattern mirrors the sharp spread widening seen after the US announced sweeping import duties on April 2, 2025.