China 10Y Yield Hits Two-Week Low

China’s 10-year government bond yield fell to around 1.8% on Monday, hitting its lowest level in two weeks, as the central bank boosted liquidity to ease seasonal funding pressures ahead of the Lunar New Year. The People’s Bank of China injected 600 billion yuan via 14-day repurchase agreements last week to help banks cover a temporary funding gap of roughly 3.2 trillion yuan, and is expected to add up to 3.5 trillion yuan more before the holidays. By providing banks with extra cash, the move increased demand for government bonds, putting downward pressure on yields. The injections come amid cash withdrawals linked to holiday spending, heavy government bond issuance and strong demand for yuan from companies, all of which tighten liquidity. Looking ahead, China is expected to cut the reserve-requirement ratio by 50 basis points and lower interest rates this year. Investors will watch this week’s inflation data for clues on PBOC policy support.

China’s 10-year government bond yield fell to around 1.80% on Friday, trading near its lowest level in over a month, as mixed PMI readings raised concerns about growth and supported demand for safe-haven bonds. A private survey showed the composite PMI rose to a three-month high in January, with both the manufacturing and services sectors continuing to expand. However, an official survey released over the weekend showed an unexpected contraction in both manufacturing and services. Meanwhile, demand for local government bonds remained elevated. Banks have been ramping up purchases, supported by record liquidity injections from the People’s Bank of China and softening loan demand. This shift comes as Beijing seeks to cool the recent equity market rally, prompting investors to turn to the relative safety of government bonds. Regulatory changes have also supported buying, with authorities easing interest-rate risk measures earlier this year to align with global standards.

China’s 10-year government bond yield fell to around 1.80% on Friday, approaching its lowest level in over a month, as demand for Chinese debt picked up. Banks have been ramping up purchases, supported by record liquidity injections from the People’s Bank of China and softening loan demand. The shift comes as Beijing seeks to cool the recent equity market rally, prompting investors to turn to the relative safety of government bonds. Regulatory changes have also supported buying, with authorities easing interest-rate risk measures earlier this year to align with global standards. Analysts expect the 10-year yield to trade between 1.7% and 2.1% in 2026, while supply of longer-dated bonds is anticipated to rise. Meanwhile, markets are eyeing upcoming PMI data, with both official and private surveys scheduled for release in the coming days.