HONG KONG -- Asian bond spreads were little changed on Wednesday, with investors unwilling to make big bets ahead of a new year that could bring a thaw in the frozen market for new offshore debt issues.

Indonesia, South Korea and the Philippines are widely seen in the race to be the first ones out with a sovereign issuance in January. A sale would follow a year in which sales of G3 bonds, or those denominated in dollars, euros and yen, nearly halved to $25.4 billion, according to Thomson Reuters data.

"The next news that will make the markets move will be new issuance. The Philippines will try to issue early next year. A lot of issuers are scrambling to issue first," said a Manila-based trader at a local bank.

The Asia iTRAXX investment-grade index excluding Japan, a key measure of risk aversion, was range-bound at 350 basis points, still marking a more than five-fold increase for the year.

Concerns over the global economy dominate as the end of 2008 approaches. Sales of US existing homes fell by a record amount last month as the year-long recession picked up pace, data showed Tuesday.

Governments worldwide are boosting spending, while implementing measures, many unprecedented, such as rescuing their financial sectors in a bid to revive growth.

Japan's cabinet on Wednesday approved a record 88.5 trillion yen ($980.6 billion) budget for the year from April, boosting spending on social security and economic steps that analysts say may not be too effective in fighting the recession.

Any new G3 issuance from Asia is likely to be expensive as investors will demand a premium to existing spread levels.

The Philippines' five-year credit default swap (CDS) -- or insurance-like contracts that provide protection against defaults or restructuring -- was unchanged at 350 basis points.

CDS levels for other countries expected to issue sovereign debt were also unchanged, with South Korea's at 300 basis points and Indonesia's at 600 basis points.