Singapore bonds shine while global markets wobble

Singapore's bonds are doing quite well. Pretty surprising, really. Global bond markets? Not so much. Long-dated government bonds everywhere face selling pressure and yields keep climbing. Singapore's doing the opposite.

Look at the numbers. They're kind of striking. This year, 30-year debt yields jumped about 45 basis points in the UK. Germany saw 74. Japan got hit with 100. Japan's long bond yield? Record high. UK 30-year gilts? Highest in nearly thirty years.

Why? Inflation fears. Rate hikes. Political mess. Big deficits.

"Bond market performance year to date has indeed been dismal for developed markets," said Winson Phoon from Maybank Securities. He pointed to "adverse local dynamics" especially affecting UK gilts and Japanese government bonds.

Singapore goes its own way

Singapore's different. Its 30-year bond yield dropped by around 75 basis points this year. Money flows in. Prices up. Yields down.

Yujun Lin at Interactive Brokers Singapore thinks he knows why. "Investors who are concerned about a cooling global economy might find Singapore's AAA credit rating and consistently conservative fiscal policy attractive."

Only nine countries worldwide maintain AAA ratings from all three major credit agencies. Singapore's one of them. Better than the US. Way better than Japan.

The constitution makes Singapore balance its budget over a government term. No overspending allowed. No net debt. Simple.

Strong currency, controlled inflation

Singapore doesn't issue bonds to cover budget holes. It's for cash flow, supporting the debt market, setting price benchmarks. That's it.

The Monetary Authority of Singapore does things differently. Exchange rate management instead of interest rate setting. Inflation rising? Singapore dollar strengthens. Import costs drop. Inflation contained. Smart.

July inflation hit just 0.6%. Lowest since January 2021. Real returns stay positive. Bond yields stay low.

The Singapore dollar gained about 5.46% against the US dollar this year. As of October 1, 2025, one Singapore Dollar equals roughly 1.17 Australian Dollars. Strong.

Phoon sees the trend: "Bids for Singapore bonds have turned more aggressive on pricing amid ample liquidity conditions." MAS seems fine with this. Yields dropped. Might stay low.

Is it perfect? Nothing is. But Singapore offers something rare these days - safety, returns, and stability all at once. Global investors seeking shelter seem to like that. A lot.