China's 10-year government bond yield fell to around 1.69% on Thursday, its lowest level since mid-July 2025, as investors responded positively to new signals of policy support from the People’s Bank of China (PBOC). The central bank pledged to introduce additional measures in a timely manner, stating it would make full use of existing policy tools, launch “practical and effective” new measures when necessary, and strengthen countercyclical adjustments. The PBOC also committed to bolstering domestic demand, supporting technological innovation, and providing greater assistance to small and medium-sized enterprises.
Still, the lack of specific details on major easing steps reinforced expectations that large-scale monetary stimulus is unlikely in the near term. Separately, the PBOC refrained from conducting seven-day reverse repos for a third straight session on Thursday, while announcing plans to inject up to CNY 600 billion per day through overnight reverse repos on August 14 and August 17–19.
