China’s 10-Year Yield Extends Decline

China’s 10-year government bond yield fell to around 1.85% on Friday, extending losses from the previous session as investors awaited the upcoming loan prime rate announcement this weekend. Investors are looking for supportive policy measures from the central bank amid concerns over slowing economic momentum and persistent deflationary pressures. On the domestic economic front, fiscal revenue rose by 0.3% year-on-year in the first eight months of 2025, slightly up from the 0.1% increase recorded in the January–July period. Meanwhile, Vice President Han Zheng recently announced plans to upgrade the free trade agreement with ASEAN, underscoring China’s intent to deepen cooperation with the 10-member bloc amid ongoing trade tensions with the United States. Similarly, President Trump stated that talks in Spain were progressing well, with a framework agreement on TikTok’s divestment finalized ahead of his scheduled meeting with Chinese President Xi Jinping on Friday.