China 10-Year Yield Hits Five-Week Low

China’s 10-year government bond yield dropped to a five-week low of 1.64% on Monday, as demand for safer assets rose amid fresh liquidity support and persistent macroeconomic uncertainty. The People’s Bank of China injected 400 billion yuan into the banking system via six-month reverse repos, following a record 1 trillion yuan operation the previous week, aiming to ease funding pressures ahead of a heavy wave of NCD maturities. The move signaled ongoing policy support, which pushed bond prices higher. Meanwhile, mixed economic data added to the cautious tone, with retail sales rising at the fastest pace in over a year, but industrial output posted its weakest growth in six months, underscoring uneven momentum in China’s recovery. Geopolitical risks also lingered, with Israel and Iran exchanging fresh attacks over the weekend, boosting risk aversion and reinforcing demand for sovereign debt. Also, uncertainty around a vague US–China trade deal framework further limited upside in yields.