Asia CDS: Beyond Cash Bonds

The credit default swap market is becoming a more important part of Asia's credit toolkit as trading volumes rise, liquidity improves and investors increasingly use the product to capture relative value opportunities, as a hedging tool, and to express long/short views. While the local market remains much smaller than the U.S. and Europe, activity is expanding rapidly with Asia ex-Japan volumes in 1H26 52% higher than 1H25. DTCC data show Asia ex-Japan corporate single-name CDS average daily notional traded volume rose to c.US$465mn in 1H26, up 52% y/y versus 12% growth globally, lifting the region's share of global corporate single-name activity to 4.2% from c.3% through 2025. Growth is concentrated in the most liquid names and index constituents: China and Hong Kong constitute about two-thirds of regional volumes; Korea and India are growing the fastest among the larger markets, and the 34 corporate constituents of iTraxx Asia ex-Japan Series 46 account for c.90% of the region's singl