China 10Y Yield Falls on PBOC Hold, Trade Truce Progress

China’s 10-year government bond yield fell to around 1.76% on Wednesday, as investors digested the People’s Bank of China’s latest monetary policy decision alongside developments in the ongoing US-China trade truce. At its August meeting, the central bank held its key lending rates at historically low levels for the third consecutive month, in line with market expectations. The one-year Loan Prime Rate (LPR) was left unchanged at 3.0%, while the five-year LPR remained steady at 3.5%. The decision came amid recent economic data suggesting a potential slowdown in domestic activity, reinforcing expectations that monetary policy will remain accommodative. Meanwhile, US Treasury Secretary Scott Bessent stated on Tuesday that Washington has held “very good talks” with Beijing regarding tariffs, as both countries work toward a possible agreement during the current 90-day suspension of new tariff measures.