FX.co ★ China 10Y Yield Falls on PBOC Hold, Trade Truce Progress

On Wednesday, the yield on China's 10-year government bond declined to approximately 1.76%, as investors considered the latest monetary policy decision from the People's Bank of China in conjunction with developments from the ongoing US-China trade negotiations. At its August meeting, the central bank decided to maintain its key lending rates at historically low levels for the third month in a row, aligning with market forecasts. The one-year Loan Prime Rate (LPR) was kept steady at 3.0%, and the five-year LPR remained at 3.5%. This decision follows recent economic indicators suggesting a potential deceleration in domestic economic activity, supporting the expectation that monetary policy will continue to be supportive. Concurrently, US Treasury Secretary Scott Bessent announced on Tuesday that Washington has engaged in "very good talks" with Beijing concerning tariffs, as both nations are working towards a potential agreement during the current 90-day halt on new tariff implementations.