FX.co ★ China 10Y Yield Lingers Near 8-Week Low

China’s 10-year government bond yield fell to around 1.79% on Wednesday, hovering near its lowest level since mid-December 2025, as markets priced in expectations of a moderately accommodative stance from the People’s Bank of China (PBoC). The central bank reaffirmed its commitment to a “moderately loose” monetary policy, indicating it will carefully calibrate the scale, pace, and timing of policy actions in line with changing domestic and global conditions, as well as market developments.

The PBoC also signaled plans to increase financial support to spur domestic demand, addressing challenges posed by industrial overcapacity and subdued consumer spending. This policy guidance preceded the latest inflation data, which showed annual consumer price inflation easing to 0.2% in January 2026 from 0.8% in December, largely due to base effects. At the same time, producer price deflation narrowed more than expected to 1.4%, helped by firmer commodity prices and regulatory measures aimed at curbing excessive competition among firms.