Starting the first trading day in June (2-Jun), the rupiah asset class saw mixed performance. The rupiah currency rebounded, while the JCI and INDOGB continued to post losses. After weakening for 3 consecutive days in the last week, the Indonesian rupiah rebounded, strengthening against the USD by +0.25% to Rp16,259/USD (vs. depreciating by -0.09% previously, or -0.43% cumulatively in the last week), thus narrowing the year-to-date losses by -0.91%. Meanwhile, in the equity market, the JCI index fell further by -1.54% to 7,065.07 (vs. -0.32% prior, or -0.53% cumulatively in the last week) but still posted gains by +1.01% YTD. The total trading value in the secondary market was relatively flat at Rp22.2tn (vs. Rp23tn previously, or Rp12.8tn average trading YTD), while foreign investors continued to record a net outflow of -Rp2.8tn (vs. -Rp1.4tn prior, or -Rp1.29tn cumulatively in the last week, or -Rp50.96tn YTD). Concurrently, most Asian equity markets closed in the negative on Monday. Japan s equity market, the Nikkei 225 index, lowered by -1.30% to 37,470.67 (vs. -1.22% prior, or +2.17% cumulatively in the last week, or -4.64% YTD), and Hongkong s Hang Seng index also fell, going down by -0.57% to 23,157.97 (vs. -1.24% prior, or -1.30% cumulatively in the last week, or +16.52% YTD) following concerns about US tariffs after President Donald Trump decides to double levies on steel and aluminum.

In the bond market, the prices of Indonesian government bonds (INDOGB) edged down, even though foreign investors recorded a net inflow of +Rp1.31tn (vs. -Rp0.91tn previously), based on the CTP PLTE on Monday. According to Bloomberg, the 5-yr FR104 traded at 100.22 (-0.10%, yield: 6.45%, +2.30 bps), the 10-yr FR103 at 99.25 (-0.20%, yield: 6.85%, +2.70 bps), the 15-yr FR106 at 101.04 (-0.08%, yield: 7.01%, +0.90 bps), and the 20-yr FR107 flat at 101.10 (yield: 7.02%). Meanwhile, the 10-yr USD global bond due in Mar-2031 did not change much, trading at 85.23 (+0.01%, yield: 4.81%), while Indonesia s 5-yr CDS edged up to 79.62 (+0.38 bps). The depreciation of the Indonesian currency aligned with the climb of the dollar index to >99.9 on Wednesday.

According to IDX s OTC trading report, Indonesian rupiah government bond trading activity picked up on the first trading day of June, Monday (2-Jun), with volume rising to Rp31.6tn (vs. Rp26.8tn on 28-May). The figure exceeded both the prior week s average daily trading volume of Rp28.8tn and the 2025 year-to-date (YTD) daily average of Rp28.6tn, while also remaining above the 2024 daily average of Rp21.7tn. The 10-yr FR0103 series (maturing on 15-Jul-35) continued to dominate as the most actively traded government bond, although its trading volume eased slightly to Rp5.5tn (vs. Rp6.1tn on the previous trading day). Its price climbed to 100.80 (+1.36%), driving the yield lower to 6.64% (-18.58 bps). Close behind, the 20-yr FR0107 series (maturing on 15-Aug-45) recorded a trading volume of Rp4.0tn (vs. Rp1.95tn previously). The bond s price edged down to 101.16 (-1.07%), lifting the yield notably to 6.92% (+10.00 bps).

The latest DMO bond flow data is (still) as of 27-May (reflecting trading on 23-May), wherein foreign ownership in government bonds increased to Rp923.7tn or 14.56% of the total outstanding. Year-to-date, Bank Indonesia has been the biggest net buyer of government bonds (amounting to +Rp83.3tn), followed by onshore banks (+Rp59.6tn), insurance and pension funds (+Rp50.9tn), foreign investors (+Rp47.1tn), other investors (+Rp31.7tn), retail investors (+Rp26tn), and mutual funds (+Rp6tn). These figures, which include both primary and secondary market activities and are adjusted for maturity, underscore strong and diversified demand across investor types.

Three domestic economic data were released on Monday: 1) The S&P Global Indonesia Manufacturing PMI increased further to 47.4 in May-2025 from 46.7 in the previous month, signaling a softer drop in factory activity. However, this was the second straight month of decline, with output falling again, though at a slower pace. New orders shrank the most since Aug-2021, and foreign sales dropped further, particularly to the US. Buying levels fell for the second month, and firms reduced both pre- and post-production inventories. 2) Indonesia s May-2025 consumer price index (CPI) declined to 1.60% YoY (vs. 1.95% YoY in Apr-2025, defying the market consensus forecast of 1.90% YoY) as price pressures subsided following the Eid al-Fitr festivities, with food prices rising the least since Aug-2020. 3) Indonesia s trade balance in April continued to book a surplus but narrowed sharply to only USD 159mn (vs. USD 4,327mn in the previous month or USD 2,800mn market consensus). As a note, this was the lowest figure since Apr-2020. Furthermore, exports rose by 5.76% YoY, accelerating from 3.15% YoY in March and the market consensus of 5.25%. Meanwhile, imports surged to 21.84% (vs. 5.34% YoY in March or 6.54% market consensus). In addition, the surplus in April was supported by a non-oil and gas trade surplus of USD 1.51bn, mainly driven by the exports of mineral fuels; animal and vegetable fats and oils; and iron and steel.

The government will conduct a conventional bond auction on 3-Jun-2025, targeting Rp26tn, with a maximum issuance of up to 150% of the target, in line with the previous auction s figures. The government will offer two SPN series (3-mo and 1-yr tenors) and reopen six fixed-rate bond series (5.1-yr FR0104, 10.1-yr FR0103, 15.2-yr FR106, 20.2-yr FR107, 29.1-yr FR102, and 39.1-yr FR0105). Based on our incoming bids model, we expect the demand to remain strong, though possibly lower than in the previous auction, with the total incoming bids estimated in the range of Rp75tn-85tn.

Domestic Corp Bond Market

On the corporate side, trading activity moderated on Monday (2-Jun), with volume declining to Rp2.3tn (vs. Rp6.0tn on 28-May). This figure fell below both the prior week s average daily volume of Rp4.3tn and the 2025 YTD daily average of Rp3.6tn. Nonetheless, it remained above the 2024 daily average of Rp2.05tn.

The LPPI03ACN3 series (maturing on 1-Jun-26), rated idA, led the corporate bond market with a trading volume of Rp310bn. Its price held steady at 100.00, yielding 7.00% (+0.03 bps). Following this, the WSKT03BCN2 series (maturing on 31-Dec-34), rated idB, posted a trading volume of Rp170bn. The bond was priced down to 80.00 (-19.92%), sending the yield sharply higher to 11.76% (+349.19 bps).

Handy Yunianto

handy.yunianto@mandirisekuritas.co.id

Ariestya Putri Adhzani

ariestya.adhzani@mandirisekuritas.co.id

Mandiri Sekuritas Research Team