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Bond prices and the rupiah continued to strengthen on Friday as investors, buoyed by recent upgrades by rating agencies, put money into Indonesia’s high-yielding assets, government officials and economists said.

The rupiah, which was under selling pressure last year as foreign investors pulled out of the country seeking safe-haven assets, rose against the dollar after a credit-rating upgrade from Moody’s Investors Service on Wednesday fueled demand for the nation’s assets. Five- and ten-year bonds also gained.

“What is needed now is that those overseas funds should go to longer-term bonds. Also, the rating upgrade will help stabilize the debt market so that the risk of a capital reversal is reduced,’’ Rahmat Waluyanto, director general of the Finance Ministry’s debt management office, said in Jakarta on Friday.

Foreign-exchange dealers and economists said the rating upgrade by Moody’s to investment level had given a boost to the country’s stock, bond and currency markets. The benchmark stock measure, the Jakarta Composite Index, closed on Thursday at its highest level since Sept. 8, though dipped a little on Friday.

“The rupiah got a boost from the news on the investment grade,’’ said one foreign-exchange dealer at a joint venture bank in Jakarta who asked not to be identified. The dealer said that Bank Indonesia was selling dollars for rupiah.

“Not only that, some foreign banks were seen selling their dollars for rupiah” ahead of plans to buy Indonesian assets in the coming days, the dealer said.

Such a move would help the rupiah further strengthen against the dollar.

The rupiah rose 1.3 percent to trade at 8,955 against the dollar on Friday. The currency gained 2.5 percent this week.

Amid the bullish sentiment in the financial market, Destry Damayanti, chief economist at Bank Mandiri, warned against a euphoric response to the recent Moody’s upgrade, saying that rising asset prices would make investing in them expensive.

“If bond yields are falling, where will pension funds and insurance companies invest their money?’’ she said, noting that falling yields would erode potential gains in bonds. Yields move in the opposite direction to price.

Still, Rahmat said that rising bond prices have lowered Indonesia’s default risk premium.

The spread in Indonesian five-year bonds narrowed to 192 basis points on Friday from a high of 325 on Oct. 4 last year, while the spread on 10-year bonds slipped to 235 bps over the same period, according to Bloomberg data. Credit default swaps measure the cost of insuring against default on bonds. A higher spread indicates elevated risk.

The yield on the five-year bonds fell to 4.8 percent on Friday from 4.9 percent the previous day, while that of the 10-year bonds fell to 5.6 percent from 5.7 percent, according to data from Indonesia Bond Pricing Agency.

Many overseas funds pulled out of Indonesia in September, seeking the safety of assets such as the dollar, putting pressure on the nation’s financial market. But the trend has reversed recently: foreign holdings of Indonesian bonds rose Rp 4 trillion to Rp 224 trillion in the past three months.