China’s 10-year government bond yield climbed toward 1.80% on Friday, rebounding from a three-month low as investors turned cautious ahead of the Lunar New Year holiday. Mainland Chinese markets will be closed from February 16 to 23, 2026, for the country’s largest annual festival.
Market sentiment this week was shaped by several key developments. Financial institutions were instructed to curb their holdings of US Treasuries and trim positions with high exposure, in response to concentration risks and ongoing market volatility. At the same time, the People’s Bank of China reiterated that it will maintain a “moderately loose” monetary policy stance, underscoring a cautious approach amid shifting domestic and global conditions.
In the bond market, China raised CNY 14 billion in its first sovereign bond auction of the year in Hong Kong, with yields falling to their lowest levels in more than a decade. On the geopolitical front, the United States has reportedly put several tech-security measures targeting China on hold ahead of a planned April summit between Presidents Donald Trump and Xi Jinping, helping to ease some pressure on markets.
