China’s bond yields retreat despite regulatory efforts

China’s government bond yields continued to decline on Wednesday for the second day in a row. This comes despite a recent announcement by authorities that measures to cool the bond market were yielding results.

The yield on the benchmark 10-year government bond, which moves inversely to prices, pulled back to 2.2273 per cent on Wednesday, following a slight decline from 2.2484 per cent on the previous day.

On Tuesday night, the Financial News, a publication affiliated with the People’s Bank of China, noted that the regulators’ warnings were effective, citing unnamed “market experts” who pointed to a step-up of government bond supplies and “a decrease of short-term speculative activity.”

“Long-term rates have edged higher to reasonable levels recently, which helps to keep an upward-sloping yield curve,” the publication added, citing the experts.

Attribution: The Nikkei Asia

Subediting: Y.Yasser