Indonesian rupiah assets opened February on mixed footing. On Monday (2-Feb), the rupiah continued to weaken, depreciating by 0.11% to Rp16,792/USD (vs. -0.14% prior; WoW: +0.28%; YTD: -0.59%), pressured by a stronger dollar index at 97.5. The dollar gained on renewed uncertainty over the US monetary policy outlook following President Donald Trump s nomination of Kevin Warsh as the next Federal Reserve Chair. Markets generally view Warsh as relatively hawkish, favoring lower rates but with a more cautious pace than other potential candidates.
Equities were corrected sharply, in line with regional markets, with the JCI plunging by 4.88% to 7,922.73 (vs. +1.18% prior; WoW: -6.90%; YTD: -8.38%) despite foreign investors returning as net buyers, recording Rp654.8bn (vs. -Rp1.53tn prior). The market turnover moderated to Rp29.1tn (vs. Rp41.6tn prior; YTD avg.: Rp34.6tn). Regionally, Asian markets also weakened, led by the Hang Seng Index (-2.23%) and the Nikkei Index (-1.25%).
In the bond market, INDOGB extended its rally, pushing yields lower across most tenors. Bloomberg data showed the 5-yr FR109 stable at 5.70%, the 10-yr FR108 down to 6.31% (-1.3 bps), the 15-yr FR106 easing to 6.52% (-0.2 bps), and the 20-yr FR107 declining to 6.58% (-1.5 bps). Meanwhile, offshore indicators softened slightly, with the 5-yr USD Indonesian sovereign yield rising to 4.44% (+1.1 bps) and the 5-yr CDS widening to 77.45 (+1.42 bps). According to PLTE data, foreign investors remained net buyers of government bonds at +Rp1.89tn.
According to IDX s OTC trading report, Indonesian government bond trading activity moderated sharply, with total volume declining to Rp23.5tn (vs. Rp34.4tn on 30-Jan). Turnover came in well below the prior week s daily average of Rp42.8tn, and the 2026 YTD average of Rp 33.8tn. The 9.5-yr FR0103 series led market activity, recording Rp4.4tn in trading volume, with the yield declining to 6.27% (-9.22 bps). This was followed by the 5-yr FR0109 and 4.5-yr FR0104 series benchmark which recorded volume of Rp3.5tn and Rp2.1tn, respectively.
Based on DMO data as of 30-Jan, foreign ownership of government bonds edged up to Rp878.8tn, equivalent to 13.16% of outstanding. Year-to-date, onshore banks remained the largest net buyers (+Rp35.5tn), followed by insurance and pension funds (+Rp26.7tn) and other investors (+Rp22.2tn), mainly from private placements. Mutual funds, Bank Indonesia, and foreign investors also recorded net inflows, while retail investors remained net sellers (-Rp2.5tn).
Several key macro indicators were released on 2-Feb: 1) The manufacturing PMI rose to 52.6 in January (vs. 51.2), signaling continued expansion. 2) The headline CPI accelerated to 3.55% YoY (vs. 2.92% prior; consensus: 3.77%), the highest since May-2023, largely due to a low base effect from electricity tariff discounts in early 2025. Core inflation increased to 2.45% YoY (vs. 2.38% prior). On a monthly basis, the CPI recorded -0.15% MoM. 3) The December trade balance posted a surplus of USD 2.51bn, bringing the full-year 2025 surplus to USD 41.05bn, supported by stronger non-oil exports despite higher oil and gas imports.
Looking ahead, the government will hold a conventional bond auction on 3-Feb, targeting Rp33tn, with a maximum issuance of Rp49.5tn. The auction will offer three SPN tenors and six fixed-rate SUN reopenings (i.e., 5.1-yr FR109, 10.2-yr FR108, 14.5-yr FR106, 19.5-yr FR107, 28.5-yr FR102, and 38.5-yr FR105). Based on our incoming bids model, we estimate a total demand of around Rp72tn (range: Rp67tn 77tn). Although lower than in the previous auction, demand should remain solid and comfortably above the government s target, reflecting still-supportive domestic demand.
Domestic Corp Bond Market
On the corporate side, trading activity picked up on Monday (2-Feb), with total volume rising to Rp4.9tn (vs. Rp4.0tn on 30-Jan). Turnover came in above the prior week s daily average of Rp3.1tn, the 2026 YTD average of Rp 3.5tn, and the 2025 daily average of Rp4.0tn.
The IMFI05BCN3 series (maturing on 21-Jun-27), rated idAA-, led the segment with Rp345bn in trading volume. Its price declined to 101.53 (-0.40%), while the yield rose to 5.99% (+13.80 bps). This was followed by the SMFP06CN2series (maturing on 15-Nov-26), rated idAAA which recorded Rp288bn in trading volume. Its price edged up to 100.77 (+0.02%), while the yield declined to 5.00% (-4.49 bps). Close behind was the SMINKP03BCN2 series (maturing on 25-Aug-26), rated idA+(sy), which recorded Rp234bn in trading volume. Its price edged lower to 101.25 (-0.91%), while the yield surged to 7.95% (+160.10 bps).
<>
