China’s 10-year government bond yield fell to around 1.75%, extending the previous session’s decline and reaching its lowest level in more than a month. The move reflects market expectations that the People’s Bank of China will maintain a persistently accommodative policy stance.
The one-year Loan Prime Rate was left unchanged at 3%, while the five-year LPR held at 3.5%, marking the eleventh straight month without adjustment and remaining at record lows. Although deflationary pressures have begun to ease tentatively and growth momentum is gradually stabilising, authorities remain vigilant to external risks.
In particular, policymakers are closely watching rising geopolitical tensions in the Middle East, following the US seizure of an Iranian cargo vessel over alleged sanctions violations and Iran’s indication that it will not join a second round of ceasefire talks. The central bank has reiterated that monetary policy will stay “supportive” and “moderately loose,” with the dual objective of sustaining economic growth while safeguarding currency stability and overall financial conditions.
