China 10Y Bond Yield Hits 4-week Low

China 10 Year Government Bond Yield decreased to 1.74%, the lowest since April 2026. Over the past 4 weeks, China 10Y Bond Yield lost 2.50 basis points, and in the last 12 months, it increased 2.80 basis points.

China’s 10-year government bond yield traded around 1.72% on Friday, hovering near its lowest level since mid-August 2025, as investors welcomed upbeat domestic economic data. Industrial profits in China surged 18.2% year-on-year in January–April 2026, from a 15.5% rise in Q1. The stronger profit growth was driven by strong demand for Chinese electronics amid robust investment in AI, alongside higher oil prices linked to Middle East tensions. The energy shock pushed factory-gate prices higher, boosting earnings for sectors such as oil and gas. China’s 10-year government bond yield has fallen sharply from around 2.7% three years ago, reflecting strong demand for safer assets amid concerns over weak domestic demand, deflation risks, and the prolonged property-sector downturn. Elsewhere, investors believe the rally in two-year government bonds has become overstretched, pushing yields unusually low relative to interest rate swaps and widening the spread to around 22 basis points.

China’s 10-year government bond yield steadied around 1.74% on Tuesday after hitting a one-month low last week, as the central bank maintained an accommodative monetary policy stance amid weakening economic momentum. The PBoC kept the one-year loan prime rate unchanged at 3% and the five-year LPR at 3.5%, leaving both at historically low levels for a twelfth consecutive month in May. The decision came despite industrial output growth slowing to its weakest pace since July 2023 and retail sales expanding at their slowest rate since December 2022. The softer economic data reinforced expectations for additional stimulus, with investors now closely watching the Communist Party’s Politburo meeting in July. Meanwhile, Chinese President Xi Jinping is reportedly expected to visit North Korea as early as next week, marking his first trip there in seven years and highlighting warming ties following the resumption of cross-border rail and air services.