China’s 10-year government bond yield held steady around 1.64% on Friday, as markets absorbed the latest policy decision from the People’s Bank of China. The central bank left key lending rates unchanged during the June fixing, in line with market expectations. The one-year loan prime rate (LPR) remained at a record low of 3%, while the five-year LPR also stayed at a record low of 3.5%.
This decision followed a 10 bps rate cut last month, aimed at easing economic pressure stemming from the potential impact of US tariffs, and came after major state-owned banks lowered deposit rates. On the geopolitical front, US President Donald Trump has reportedly extended a final ultimatum to Iran to reach a settlement over its nuclear program, delaying any decision on potential military action for up to two weeks. Meanwhile, China swiftly condemned Israel for its attack on Iran. However, Beijing has stopped short of offering Iran any substantial support beyond maintaining regular trade ties.
