The yield on South Africa’s 7.75 percent debt due February 2023 dropped 12 basis points, or 0.12 percentage point, this week to 6.52 percent, while that for Mexico’s 6.5 percent notes maturing in June 2022 fell 11 basis points to 4.68 percent, according to data compiled by Bloomberg.

The Philippine 10-year yield reached 3.29 percent April 1, the least since Bloomberg began tracking the data in 1998, and was steady today at 3.53 percent. South Korea’s five-year notes hit an all-time low of 2.51 percent March 28 and jumped 20 basis points today to 2.78 percent, the biggest increase since May 2009, after the central bank refrained from cutting its benchmark interest rate.

Weakening Yen

The Japanese currency has weakened against all 25 emerging- market counterparts tracked by Bloomberg this year and touched 99.88 per dollar yesterday, the lowest level since April 2009. Depreciation boosts returns on overseas investments for yen- based investors. The yen has plunged 21 percent against the dollar in the past six months, the most among 32 major currencies tracked by Bloomberg. The Argentine peso, the second- biggest loser, fell 8.3 percent.

Yen-based investors will earn 12 percent on Argentine peso assets including interest income by the end of this year, 7.3 percent from India’s rupee and 7.2 percent from those denominated in South Korea’s won, based on the median estimates of analysts surveyed by Bloomberg. Iceland’s krona led gains among 25 emerging-market currencies with a 24 percent advance, followed by the Mexican peso at 22 percent, the Thai baht’s 21 percent and the Brazilian real’s 19 percent.

‘Top Choices’

Investors now demand a premium of 282 basis points to hold emerging-market sovereign bonds instead of U.S. Treasuries, down from 355 basis points a year ago, JPMorgan data show.

“Funds are flowing into emerging markets as Japan steps up loosening,” Kenix Lai, a Hong Kong-based foreign-exchange analyst at Bank of East Asia Ltd., said by phone today. “Japanese bond yields are so low that some of the funds might leave Japan for higher-yielding assets, and emerging markets are the top choices” for them, he said.

Asian emerging-market bonds that are perceived to be less risky than those of some of the largest developing nations will attract more global investments, according to Western Asset Management, which oversaw $462 billion of assets as of Dec. 31.

Five-year credit-default swaps protecting sovereign debt cost 94 basis points yesterday for Thailand, 82 for South Korea and 100 for the Philippines, according to data provider CMA, which is owned by McGraw-Hill Cos. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements. Similar contracts are at 117 basis points for Brazil and 154 for South Africa.