US Treasury Yields Rise as Rupiah Weakens

RRI.CO.ID, Jakarta - The yield on the 10-year US Treasury bond has risen above 5.3 percent, approaching its highest level since 2002. Selling pressure on US government bonds could exert further strain on the Indonesian rupiah.

Meanwhile, the US Dollar Index has remained flat at around 102.1. In morning trading, the rupiah was held steady but tended to weaken, trading at around IDR 17,915 per USD.

With no major economic data scheduled, financial markets may find room to rebound. Global oil prices also fell in morning trading, with Brent crude trading at around 100 USD a barrel.

Indonesia's main stock index, the IHSG, opened slightly higher at around 6,149. On a technical basis, the index is expected to move between 6,100 and 6,170.

However, investors are still watching Asian stock markets, which have mostly consolidated. This could push the IHSG into negative territory later in the trading session.

The rupiah is expected to trade between IDR 17,850 and 17,950 per USD. The currency remains under pressure from negative external sentiment, particularly from the US bond market.

Continued selling of US government bonds could create similar pressure on Indonesia's financial markets. As a result, the rupiah is unlikely to fully recover in the short term.

Markets are also concerned about high inflation amid the continuing conflict in the Middle East. Meanwhile, gold prices fell to around 4,126 USD per troy ounce, or about IDR 2.38 million per gram.

Writer: Gunawan Benjamin (Economist, UISU)