China’s 10-Year Yield Extends Decline

China’s 10-year government bond yield fell to around 1.72% on Friday, extending its decline from the prior session as investors moved toward safer assets amid weak economic indicators. Industrial output growth slowed to a seven-month low in July, down from a recent three-month peak and falling short of market expectations. Adding to investor concerns, retail sales growth weakened to a six-month low, while the unemployment rate inched up to its highest level in four months. In the housing sector, new home prices across 70 major cities continued to decline for the 25th consecutive month, although the pace of contraction in July was the mildest since March 2024. These lackluster data underscore the growing challenges for Chinese policymakers as domestic demand and external pressures persist. Authorities have recently ramped up policy support and issued renewed commitments to boost consumption and rein in excessive price competition to stay on track for the 2025 growth target of around 5%.