By Aaron Pan Dec. 8 (Bloomberg) -- The cost of protecting investors in Asia-Pacific bonds from default declined as U.S. President-elect Barack Obama pledged the biggest public works program in half a century. The Markit iTraxx Japan index fell 3 basis points to 370 at 9:46 a.m. in Tokyo, according to prices from Credit Suisse Group AG. The benchmark of 50 investment-grade Japanese companies includes All Nippon Airways Co. and Japan Tobacco Inc. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan slid 5 basis points to 425, according to BNP Paribas SA. Obama said Dec. 6 he'll make the “single largest new investment” in roads, bridges and public buildings since the Eisenhower Administration to lift the sagging economy and create jobs. The announcement came a day after a government report showed employers in the U.S. slashed 533,000 jobs last month, the biggest decline in 34 years. “Even though everything is going south, all these bailouts are designed to save the system and it keeps credit stable,” said Brayan Lai, a credit analyst at Calyon in Hong Kong. “As long as there are no more major shocks, this should be the trend heading into the new year.” Governments worldwide have introduced measures to buttress their economies against the worst financial crisis since the Great Depression. India lowered interest rates over the weekend and announced it will spend an additional 200 billion rupees ($4 billion) to boost its economy. China's annual economic policy meeting will start today, the official Xinhua News Agency said. 'Painful Reminder' Obama said his plan to create or preserve 2.5 million jobs will also include making public buildings more energy efficient, repairing schools and modernizing health care with electronic medical records. The U.S. payrolls report was “another painful reminder of the serious economic challenge our country is facing,” he said. The Markit iTraxx Australia index was quoted 10 basis points lower at 390 basis points, Citigroup Inc. data show. The benchmark is tied to the debt of 25 companies, including Qantas Airways Ltd. and BHP Billiton Ltd. The indexes are benchmarks for protecting bonds against default and traders use it to speculate on changes in credit quality. A decrease in price indicates improving perceptions of credit quality and an increase suggests deterioration. Credit-default swaps pay the buyer face value in exchange for the underlying securities if a borrower fails to adhere to debt agreements. A basis point, or 0.01 percentage point, is worth $1,000 on a swap that protects $10 million of debt. To contact the reporter on this story: Aaron Pan in Hong Kong at Apan8@bloomberg.net.

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