China’s 10-year government bond yield fell to 1.67% on August 18, its lowest level since July 2025, down 7 basis points over the past month and 11 basis points from a year ago. Weak July economic data drove the decline, with industrial production, retail sales, and fixed-asset investment all missing consensus expectations, pushing growth estimates below the government’s official 4.5% to 5.0% target range. The People’s Bank of China responded by injecting 349 billion yuan ($51.7 billion) into the financial system on August 15. The gap between US and Chinese 10-year yields stands at roughly 305 basis points, creating persistent downward pressure on the yuan and complicating the PBoC’s balancing act between growth support and currency stability. Market participants are now pricing in additional fiscal or monetary measures from the National People’s Congress Standing Committee session scheduled for August 25-28.
Source: Read the original article
