China 10Y Bond Yield Hits 5-week Low

China 10 Year Government Bond Yield decreased to 1.79%, the lowest since March 2026. Over the past 4 weeks, China 10Y Bond Yield lost 3.10 basis points, and in the last 12 months, it increased 15.40 basis points.

China’s 10-year government bond yield fell to around 1.80% on Monday, hitting its lowest level in over a month as investors sought refuge in safe-haven assets following failed US–Iran peace talks. The negotiations ended without a breakthrough, while President Trump announced a full naval blockade of the Strait of Hormuz, raising further fears of global energy disruptions. Trump also warned that countries, including China, could face tariffs of up to 50% if they support Iran militarily, though Beijing denied any involvement. Amid the evolving Middle East conflict, Chinese assets such as bonds have emerged as relative safe havens, supported by energy resilience, policy support, limited exposure to geopolitical tensions, and signs of improving domestic momentum, as seen in the exit from producer deflation that has persisted since September 2022. The 10-year yield has risen by only about 3 bps through Friday, compared with gains of at least 40 bps in US and European peers.

China’s 10-year government bond yield steadied around 1.81% on Friday, extending a subdued prior session, as investors weighed the People’s Bank of China’s cautious easing stance against mixed inflation data. Consumer prices rose 1% year-on-year in March 2026, easing more than expected as Lunar New Year-driven demand faded. Meanwhile, producer prices rebounded 0.5%, marking its first increase since September 2022, partly due to higher energy costs amid Middle East tensions and disruptions in the Strait of Hormuz. While China’s strategic reserves and diversified energy imports have helped cushion external shocks, signs of domestic cost pass-through are emerging, reflected in the third retail fuel price hike since late February. Nevertheless, the central bank maintained a cautious stance at its latest quarterly meeting, signaling limited appetite for aggressive monetary easing following a modest rate cut in 2025.