MANILA, June 25 (Xinhua) -- China, China's Hong Kong, Indonesia and Vietnam posted declines in yields on both short-term and long-term government bonds, while South Korea, Malaysia and the Philippines posted increases, according to a new Asian Development Bank (ADB) report released on Friday.

The latest Asia Bond Monitor said bond yields in emerging East Asia diverged due to market-specific factors, while uncertainty about the COVID-19 pandemic and concerns over inflationary pressure led to subdued investor sentiment, said the report.

The report said yields on short-term (two-year) government bonds from Feb. 28 to May 21 largely declined on the back of accommodative liquidity conditions. Uneven recovery paths and market-specific economic fundamentals, meanwhile, caused long-term (10-year) government bond yields to diverge across the region, added the report.

"Persistent uncertainty surrounding the COVID-19 pandemic and looming inflationary pressure (has) put a dent in emerging East Asia's bond markets, leading to volatility and mixed performances in the region's financial and equity markets," ADB Chief Economist Yasuyuki Sawada said in a statement.

"The region's fast-expanding sustainable bond markets, underpinned by a growing interest in a green and inclusive recovery and conducive public policies, will be key to the region's efforts to rebuild smarter after the pandemic," Sawada said.

Emerging East Asia comprises China, China's Hong Kong, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The region's market now accounts for about 20 percent of the global sustainable bond market, making it the largest after Europe, according to ADB. Enditem

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