China’s 10-year government bond yield dropped below 1.75% on Tuesday, reaching its lowest level since early September, after the People’s Bank of China prepared to resume sovereign bond trading after a months-long hiatus. The central bank had halted operations in January amid high demand for haven assets, which previously pushed yields to record lows, but with market conditions stabilizing, it is restarting open-market trading to support liquidity and orderly debt-market functioning. Analysts say the move is expected to help smooth the yield curve and stabilize supply-demand dynamics, reinforcing Beijing’s broader efforts to maintain stable funding conditions while managing financial risks. Meanwhile, optimism over a potential US–China trade deal tempered the decline in yields, as officials finalized a framework ahead of the Trump-Xi meeting in South Korea. Markets also await upcoming PMI releases, with official data expected this week and private surveys due next week.
