HONG KONG -- The Philippines’ new 10-year bond rose on Thursday, a day after it was launched as investors locked in the high-yielding debt, but the broader market was steady.

Investors snapped up $1.5 billion in Philippine bonds on Wednesday at a yield of 8.5 percent, even as data pointed to a grim economic outlook for the United States. The bonds rose on Thursday, pushing the yield down to 8.35 percent.

The issue was four times oversubscribed, indicating high demand for debt offering bigger returns, and was priced at the lower end of the indicative yield.

"The new issue did pretty well. There is still a lot of appetite for some risks despite the gloomy data coming from the United States," said a Manila-based trader.

The Asia iTRAXX investment-grade index excluding Japan, a key measure of risk aversion, was little changed at 285 basis points from 280 on Wednesday, a Hong Kong-based trader said.

The equivalent high-yield index was also steady at 1,060/1,180 basis points from 1,050/1,200 on Wednesday.

Other markets, most notably equities, were rattled by a report from ADB Employer Services on Wednesday that showed US private-sector employers shed 693,000 jobs in December, far more than economists had forecast.

The report raised fears that a more comprehensive government report on Friday will be dismal as well and point to a rapidly weakening economy.

Reflecting the firmer tone of the new sovereign bonds, Philippines' five-year credit default swaps (CDS) – or insurance-like contracts that protect investors against defaults or restructuring -- narrowed to 300 basis points from 320.

The Philippines is the first in Asia to offer sovereign debt overseas and traders expect South Korea and Indonesia to launch their own bonds within the first half of 2009.

"It would seem to us, the financial system is in a rehabilitation mode, but countries have to go to markets to take advantage of these spurts in risk-taking because they may not persist throughout the year," said Brian Baker, chief executive director of PIMCO Asia Ltd. in Hong Kong.

South Korea's five-year CDS narrowed to 255/285 basis points from 270/285 even as the country's president, Lee Myung-bak, sounded the alarm over the economy, calling on his officials to take pre-emptive measures to counter what he called a state of national economic emergency.