(Fab 10): As disillusion sets in among US Treasury traders about the Trump administration’s lack of progress on reflating the American economy, one major beneficiary is becoming apparent: emerging Asia.

The world’s fastest-growing region offers higher yields and domestic growth stories that are already attracting a renewed influx of capital, with yield premiums on junk-rated bonds hovering near the three and a half year-low they reached last month. Herald Van Der Linde, HSBC Holdings Plc’s head of equity strategy for the Asia-Pacific region, said shares in China, India and Indonesia could see gains of at least 10% this year should a "reality check" set in among investors with regard to US President Donald Trump’s policies.

In the US, benchmark 10-year yields have retreated to around 2.36% from the highs near 2.6% reached in December. Treasuries rallied after Laurence D. Fink, chief executive officer of BlackRock Inc., the world’s biggest fund manager, warned there’s a greater chance of the level dipping below 2% because some US fiscal stimulus policies won’t be in place until 2018.

“The funds are flowing back to Asia” with US inflation-adjusted rates less attractive, said Jun Kato, a senior fund manager in Tokyo at Shinkin Asset Management Co., which oversees about US$8.9 billion ($12.7 billion) of assets. “Asia’s emerging markets will need funds for infrastructure and other projects, and have many countries that have a current-account surplus. Now, the real rates in Asia look good again.”

The Wednesday rally in Treasuries bolstered demand for bonds in the Asia-Pacific region Thursday, with Australian 10-year yields touching the lowest since November and equivalent New Zealand yields slipping to a three-week low after that country’s central bank cited uncertainty in the global outlook in its decision to hold interest rates at a record low.

Emerging Asian economies including South Korea still have vulnerabilities, with their reliance on exports, and the Trump administration’s policies on trade aren’t yet clear. The American budget process has yet to begin in earnest, so Treasury yields could still resume their advance -- taking the dollar with it.

But for now when it comes to Asia, bond issuers are among those enjoying a boost. Almost US$6 billion of junk-rated debt has been sold in the region so far this year, the highest volume since the same period of 2013, according to data compiled by Bloomberg.

“From the supply side, the pipeline has been building up -- but not excessively to crowd the market as they are mostly for refinancing, while from the demand’s point of view, funds have decent cash levels, inflows and bond redemption,” Zhi Wei Feng, executive director, credit trading at Standard Chartered Plc, said in an interview.

In the case of a correction in US markets, Van Der Linde at HSBC suggested buying Chinese stocks that are more likely to react to domestic developments -- such as selected retailers and alternative energy producers like solar or wind generators. Speaking in an interview Monday, he also recommended large-cap banks in India and consumer and automotive names in Indonesia.