China 10Y Bond Yield Hits 8-week Low

China’s 10-year government bond yield fell to 1.70% on Friday, hitting its lowest level in a month, as Hong Kong’s relaunch of Chinese government bond futures signaled Beijing’s push to deepen debt market integration and yuan internationalization. The futures, debuting Monday on the Hong Kong Exchange, mark a third attempt, with investors seeing more favorable conditions amid Beijing’s efforts to expand foreign access to its bond market. The five-year contract will have a CNY 500,000 ($73,985) notional size, with cash settlement instead of physical delivery. Meanwhile, investors remained focused on potential policy support after China’s latest PMI data showed manufacturing activity slipped into contraction for the first time since February in July 2026, while non-manufacturing activity unexpectedly declined. The Politburo meeting reaffirmed plans to strengthen economic support but provided limited details on the scale and timing of potential stimulus measures.

China 10 Year Government Bond Yield decreased to 1.71%, the lowest since June 2026. Over the past 4 weeks, China 10Y Bond Yield lost 2.50 basis points, and in the last 12 months, it decreased 1.00 basis points.

China’s 10-year government bond yield fell to around 1.71% on Thursday, hitting its lowest level in nearly a month, as investors welcomed a more supportive policy tone from the Politburo meeting. The government pledged to roll out pragmatic and effective new policies in a timely manner as China transitions toward new growth drivers, while stressing the importance of addressing persistent economic headwinds. Policymakers also vowed to accelerate public spending and improve the utilization of funds raised through government bond issuance, a move widely expected by economists after a prolonged slowdown in fiscal spending weighed on economic growth. The policy signals came after weaker-than-expected Q2 GDP growth, which fell below the government’s 4.5%-5% target range. However, despite the more supportive tone, the Politburo provided limited details on the scope and timing of potential policy measures.