FX.co ★ China 10-Year Yield Holds Decline

The yield on China's 10-year government bonds has decreased to approximately 1.66%, remaining near its lowest point in almost two months. This decline comes as investors increasingly seek refuge in safer assets amid rising tensions between the US and China over trade issues. On Monday, President Trump announced plans to impose an additional 50% tariff on Chinese products starting Wednesday, adding to the existing duties, which already amount to 54%. In retaliation, China has vowed further countermeasures, asserting it will "fight to the end" to safeguard its interests. Previously, China had declared a 34% tariff on all US imports set to take effect this Thursday, mirroring the recent actions taken by Washington. This series of events has heightened expectations for more supportive fiscal and monetary policies from Beijing. China has indicated that it possesses ample flexibility to lower borrowing costs, adjust reserve requirements for banks, and widen the fiscal deficit in efforts to stimulate the economy.