China’s 10-year government bond yield fell to around 1.80% on Thursday, hitting a near one-week low, despite signals that the central bank is in no rush to further ease monetary policy amid persistent domestic and external headwinds. The one-year Loan Prime Rate (LPR), the benchmark for most corporate and household lending, was held steady at 3%, while the five-year LPR, the primary reference rate for mortgages, remained at 3.5% following a 10-basis-point cut in May 2025. This move followed the People’s Bank of China’s decision to maintain the seven-day reverse repo rate, reinforcing expectations of a more cautious monetary policy stance. Recent economic data highlighted persistent weakness, with fixed-asset investment experiencing a notable contraction, industrial production and retail sales continuing to lose momentum, and exports declining unexpectedly. Investors are now turning their focus to next week’s PMI releases for additional insights into China’s economic outlook.
