China 10Y Yield Hits Near 6-Month High
China's 10-year government bond yield rose to nearly six-month highs, reaching approximately 1.92% on Thursday. This movement comes as investors assessed recent remarks made by a Deputy Governor of the People’s Bank of China. The Deputy Governor highlighted the continued confidence global investors have in China's bond market and discussed efforts to allow Chinese onshore bonds to be recognized as eligible collateral in Hong Kong and other international markets. By the end of August 2025, China's bond market has expanded to CNY 192 trillion, positioning it as the world's second-largest. Presently, foreign investors possess about 2% of bonds denominated in yuan. Additionally, the Deputy Governor underlined the PBOC's commitment to enabling foreign institutions more access to repurchase operations to enhance the liquidity and efficiency of yuan bond transactions. Regarding monetary policy, the PBOC maintained loan prime rates unchanged for the fourth consecutive month in September, with the one-year rate at 3% and the five-year rate at 3.5%.
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