China’s Central Bank Suspends Treasury Bond Purchases

SHANGHAI (Reuters) – China’s central bank announced on Friday that it has temporarily suspended treasury bond purchases due to a short supply of bonds, leading to a spike in yields across various tenors.

The People’s Bank of China (PBOC) stated in a release that it would resume bond buying based on the supply and demand in the government bond market.

This decision follows several warnings from the PBOC about potential bubble risks in China’s booming bond market, where long-term yields have consistently been reaching record lows.

As a result, yields, which move inversely to bond prices, surged following the announcement. China’s 30-year treasury yield increased by five basis points during early trading, while the 10-year yield rose by four basis points.