SHORT ANSWER
The core idea
A foreign investor's return depends not only on the bond yield but also on the cost of hedging currency exposure.
THE MECHANISM
What is happening underneath
Interest-rate differentials are embedded in forward exchange rates, so a high-yielding foreign bond may offer little advantage after hedging.
MARKET INTERPRETATION
How investors should read it
This helps explain cross-border demand even when headline yields appear very different.
BONDSTATS TAKEAWAY
The same market move can carry different information depending on which maturity, issuer and risk premium is changing. Read the question together with the underlying concepts rather than treating one price move as a universal signal.
RELATED CONCEPTS
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