China 10Y Yield Hits Over 8-Month Low

China’s 10-year government bond yield dropped to around 1.72% on Wednesday, hitting its lowest level since August 2025, as strong liquidity outweighed concerns about rising debt supply. The People’s Bank of China has kept conditions loose to support the economy, with overnight borrowing rate hovering near their lowest levels since 2023, even as Beijing prepares a record 30-year bond sale under its ultra-long sovereign program on Friday. Chinese government debt is increasingly seen as a safe-haven amid global uncertainty, particularly energy-market volatility tied to the Middle East conflict. Meanwhile, Indonesia will allow China to issue sovereign bonds in its domestic market on a reciprocal basis, advancing regional financial integration. The arrangement follows talks between Purbaya and Chinese Finance Minister Lan Fo'an at the IMF-World Bank Spring Meetings, where cross-border bond issuance was a key topic.

China’s 10-year government bond yield fell to around 1.75% on Tuesday, marking its third straight session of losses and hitting its lowest level in over a month, as markets continued to price in expectations of an accommodative policy stance from the central bank. The one-year Loan Prime Rate remained unchanged at 3%, while the five-year LPR held steady at 3.5%, marking the eleventh consecutive month of no adjustment and record lows. While deflationary pressures have shown tentative signs of easing and growth momentum is gradually stabilising, authorities remain alert to external risks, including the ongoing Middle East war. Recent developments include President Trump stating he’s unlikely to extend the two-week ceasefire, while Tehran is reportedly sending representatives despite earlier signals it wouldn’t join further talks. The central bank reiterated it will keep policy “supportive” and “moderately loose” to sustain growth while maintaining currency and financial stability.

China’s 10-year government bond yield held below 1.78%, nearing a seven-week low as hopes for a potential Middle East peace deal eased global inflation concerns, while investors remained cautious despite China’s stronger economic momentum at the start of the year. The economy grew 5% in the first quarter from a year ago, accelerating from the 4.5% gain in the prior quarter and beating forecasts. However, underlying momentum appeared uneven, with industrial output and retail sales slowing, while the jobless rate hit a thirteen-month high. Meanwhile, the US and Iran are considering extending their two-week ceasefire to allow more time for negotiations, even as the Strait of Hormuz remains effectively closed under a dual blockade. Looking ahead, China is set to issue CNY 15.5 billion of government bonds in Hong Kong on April 22, the largest Dim Sum bond tranche since October 2023, a move expected to support offshore yuan liquidity and put downward pressure on yields.