China 10Y Yield Nears 3-Month Lows

China’s 10-year government bond yield fell to around 1.79% on Tuesday, moving back toward three-month lows, as investors returned from a week-long holiday with caution amid trade policy concerns, while the People's Bank of China kept rates unchanged for the ninth straight month. The central bank held its one-year and five-year loan prime rates at 3.0% and 3.5%, respectively, indicating that authorities are in no rush to implement broad monetary easing after recent sector-targeted cuts. The decision also reflects a careful balance between supporting growth and maintaining financial stability. Meanwhile, markets reopened after the holidays to a cautious mood, as US President Trump announced plans to raise a temporary 10% tariff on imports to 15%, in response to a Supreme Court ruling. He further warned that countries backing away from recent trade deals could face even higher duties. Still, sentiment was aided by expectations that Trump’s new tax policies could boost Chinese exports.

China’s 10-year government bond yield rose toward 1.80% on Friday, rebounding from a three-month low as investors took a cautious approach ahead of the Lunar New Year holiday. Mainland China markets will be closed Feb. 16–23, 2026, for the country’s biggest festival. Earlier this week, several developments shaped market sentiment. Financial institutions were advised to limit US Treasury holdings and reduce high-exposure positions amid concentration risk and market volatility. Meanwhile, the central bank reaffirmed its “moderately loose” monetary policy, signaling caution amid evolving domestic and global conditions. In the bond market, China raised CNY 14 billion in its first sovereign bond auction in Hong Kong this year, with yields hitting its lowest levels in over a decade. On the geopolitical front, the US has reportedly paused several tech-security measures targeting China ahead of a planned April summit between Presidents Donald Trump and Xi Jinping, easing some market pressure.

China’s 10-year government bond yield fell to around 1.78% on Thursday, hitting its lowest level since November 2025, supported by a moderately accommodative stance from the People’s Bank of China. The central bank reiterated its commitment to a “moderately loose” policy, signaling careful adjustments to the pace and timing of measures in response to evolving domestic and global conditions and market development. The guidance comes ahead of the latest inflation data, which showed annual consumer price growth slowing to 0.2% in January 2026 from 0.8% in December, while producer price deflation eased to 1.4% from 1.9%. Meanwhile, China sold CNY 14 billion in sovereign bonds in its first Hong Kong auction of the year, at the lowest yields in over a decade, reflecting strong demand and supporting Beijing’s push to expand the yuan’s global use. The 2-year bond was issued at 1.38%, while 3-year and 5-year bonds were sold at 1.4% and 1.57%, with 10-year and 30-year maturities also offered.