China's 10-year government bond yield climbed toward 1.74% on Friday, rebounding from the prior session as investors interpreted the People's Bank of China’s latest moves as a signal of greater caution.
In June, the central bank made net purchases of 10 billion yuan ($1.47 billion) in government bonds, a sharp decline from 50 billion yuan in May and the smallest monthly total since October 2025. This reduction suggests policymakers are aiming to curb further declines in yields and rein in excessive speculation in the bond market. The shift also aligns with the PBOC’s rollout 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 indicated that the non-manufacturing PMI inched up to 50.2 from 50.1, defying forecasts for a slight contraction to 49.9.