FX.co ★ China 10Y Yield Returns to 1-Year Low

China’s 10-year government bond yield fell to around 1.70% on Monday, returning to its lowest level since August 2025. The move followed softer inflation data, which strengthened expectations that Beijing has more room to deliver additional policy support over the rest of the year. Annual consumer inflation eased to a six-month low of 0.5% in July, driven by further declines in food prices and slower increases in non-food costs. Producer price inflation also cooled, slipping to 3.5% from 4.1%, its first deceleration since turning positive in March after the oil-price surge tied to tensions in the Middle East. At a recent meeting, the Political Bureau of the Communist Party of China Central Committee committed to more proactive and effective macroeconomic policies, faster deployment of fiscal funds and bond proceeds, and continued backing for equipment upgrades and consumer goods trade-in programs. The leadership also emphasized the need to bolster domestic demand amid subdued consumer spending, even as exports and industrial activity remain robust.