The Dollar Loses Some Dominance in Asia as Euro Borrowing Increases
December 7, 20251221 ViewsRead Time: 2 Minutes
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Recent data indicates a gradual shift in Asian financing markets, where borrowers have begun increasingly relying on the euro instead of the US dollar, reflecting a desire to diversify portfolios and reduce dependence on the American currency. Euro-denominated bond issuances in the Asia-Pacific region have risen to a record level of 23% of total issuances this year, up 6% from 2024, according to Bloomberg data.
Although the dollar still constitutes the majority of financing deals, its market share has begun to decline gradually, with euro issuances rising by 75% to reach €86.4 billion ($100.7 billion). Analysts suggest that these shifts are a result of strategic factors including lower financing costs in euros and investors' desire to mitigate risks associated with focusing on the dollar.
These movements reflect the impact of US President Donald Trump's trade policies and his pressures on the Federal Reserve, which have contributed to a decline in investor confidence in the dollar, pushing some Asian borrowers to adopt the euro and other assets as alternatives. Experts also noted that the drop in the interest rate premium on euro-dollar swaps has enhanced the appeal of financing in the European currency.
Highlighting the major European deals this year are the issuance of Chinese bonds worth €4 billion and the Japanese telecommunications giant NTT Inc's issuance of bonds worth €5.5 billion, marking the largest euro issuance by a company from Asia in 2025, reflecting an increasing trend towards multiple currencies in debt markets, confirming the shift in international financing towards a more multipolar world.
Although the dollar still constitutes the majority of financing deals, its market share has begun to decline gradually, with euro issuances rising by 75% to reach €86.4 billion ($100.7 billion). Analysts suggest that these shifts are a result of strategic factors including lower financing costs in euros and investors' desire to mitigate risks associated with focusing on the dollar.
These movements reflect the impact of US President Donald Trump's trade policies and his pressures on the Federal Reserve, which have contributed to a decline in investor confidence in the dollar, pushing some Asian borrowers to adopt the euro and other assets as alternatives. Experts also noted that the drop in the interest rate premium on euro-dollar swaps has enhanced the appeal of financing in the European currency.
Highlighting the major European deals this year are the issuance of Chinese bonds worth €4 billion and the Japanese telecommunications giant NTT Inc's issuance of bonds worth €5.5 billion, marking the largest euro issuance by a company from Asia in 2025, reflecting an increasing trend towards multiple currencies in debt markets, confirming the shift in international financing towards a more multipolar world.
