Some investors are flocking to Asian fixed income assets, lured by the prospect of juicy returns even as large chunks of the global bond market are seeing yields lurch deeper into negative territory.

Income-seeking bond investors have had a tough few years.

A record plunge in developed market bond yields, which move inversely to prices, has caught large sections of the market by surprise. Japanese bonds maturing in 40 years yield less than 0.10 percent, while investors are paying for the privilege of lending short-term money to Spain and Italy, countries where fiscal profligacy had sparked a crisis only a few years ago.

The U.K.'s vote last week to exit the European Union (EU) made it even tougher, with a rush of funds seeking safer havens pouring into government bonds, pushing some to record low yields.

Following the turmoil of the Brexit vote, the amount of bonds with negative yields has jumped to $11.7 trillion. That's a 12.5 percent increase since the end of May, according to a Fitch Ratings report Wednesday.

The portion of the bond market in negative-yielding territory was likely only to deepen, particularly in Europe and Japan, and that's set to drive funds into Asia's bond markets, analysts said.

"The quantitative easing coming out of Japan and coming out of Europe continues to drive flows into other high-yielding assets," Stephen Chang, head of Asia fixed income at JPMorgan Asset Management, told CNBC's "Street Signs" on Wednesday.

"We are looking at emerging market countries and Asian countries for their yield quite a bit more. That would be the next destination for people to chase yield," he said.

Chang said that while he liked dollar-denominated bonds by Asian borrowers, he preferred Asia local-currency issues, noting some of the region's central banks still had capacity to cut rates and currencies appeared cheap after the dollar rallied last year. That suggested the local-currency bonds could rise.

Jack Siu, investment strategist for Asia Pacific at Credit Suisse, was taking a similar approach, calling Asian fixed income "the only bright spot in markets". Siu also noted that some local-currency bonds, such as those issued by governments in Indonesia and China, were beginning to show value.

Indonesia's benchmark 10-year government bond was yielding around 7.4 percent, while China's was yielding around 2.8 percent on Thursday; that's a stark contrast to the German 10-year bund's yield (Germany: DE10Y-DE) around negative 0.107 percent and the Japan 10-year government bond's yield (Japan: JP10Y-JP) at around negative 0.214 percent.

The positive view on Asia fixed income stood in contrast to Credit Suisse advising clients to take a low-risk strategy, underweighting equities and moving toward cash.

"The reason why we got this kind of rally in Asia bonds is because now we have a negative yielding environment," Siu said.

He said demand for Asia bonds had risen amid the European Central Bank's plan to buy around 21 billion euros of corporate bonds there every month.

"A lot of managers have to go outside of their native habitats and go to Asia to pick up the yield away from the European bonds, which are yielding less than the fees they're charging their clients," he said.

The JPMorgan U.S. dollar Asia Credit Index had a yield to maturity of around 4.09 percent Thursday.

At the same time, Siu noted the supply of Asia bonds had fallen by around 14 percent so far this year, as market volatility dissuaded issuers and many Chinese issuers turned to the onshore markets.

Siu advised sticking to investment-grade dollar-denominated Asia bonds to keep cash safe, warning that junk-rated issuers should be avoided.

"The credit fundamentals are actually deteriorating. The flood of liquidity produced by the ECB is helping to cover the poor fundamentals in the company issued bonds," he said, adding he expected Asia high-yield bond defaults would rise.

—Jeff Cox contributed to this article.

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—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

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