China’s 10-year government bond yield moved higher toward 1.74% on Friday, rebounding from the previous session as investors interpreted the People’s Bank of China’s latest actions as signaling increased caution. The central bank purchased a net 10 billion yuan ($1.47 billion) of government bonds in June, down sharply from 50 billion yuan in the previous month and marking the lowest monthly total since October 2025. The pullback in purchases suggests policymakers are seeking to limit further declines in yields and discourage excessive speculation in the bond market. The move also reflects the PBOC’s introduction of a new overnight open-market operation last month. On the economic front, a private survey showed that China’s services PMI eased to 54.1 in June from 54.4 in May but remained above market expectations of 53.0. Earlier in the week, official data showed that the non-manufacturing PMI edged up to 50.2 from 50.1, defying expectations for a slight contraction of 49.9.

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