FX.co ★ China's 10-Year Bond Yield Nears 2-Month Low

China's 10-year government bond yield dropped significantly to approximately 1.64% on Friday, marking its lowest point in nearly two months. This decline occurred as investors shifted towards safer assets due to rising trade tensions and increasing anticipation of policy easing. On the same day, China announced plans to implement a 34% tariff on all imports from the United States starting April 10. This action mirrors the reciprocal tariffs previously placed on Chinese goods and includes counteractions such as restricting rare earth exports. These developments have intensified market apprehension regarding the potential economic repercussions, thereby boosting expectations for additional fiscal and monetary support from Beijing. China has suggested it possesses the capability to lower borrowing costs, reduce reserve requirements for banks, and expand the fiscal deficit in an effort to strengthen the economy.