China’s 10-year government bond yield fell to around 1.79% on Tuesday, moving back toward three-month lows, as investors returned from a week-long holiday with caution amid trade policy concerns, while the People’s Bank of China kept rates unchanged for the ninth straight month. The central bank held its one-year and five-year loan prime rates at 3.0% and 3.5%, respectively, indicating that authorities are in no rush to implement broad monetary easing after recent sector-targeted cuts. The decision also reflects a careful balance between supporting growth and maintaining financial stability. Meanwhile, markets reopened after the holidays to a cautious mood, as US President Trump announced plans to raise a temporary 10% tariff on imports to 15%, in response to a Supreme Court ruling. He further warned that countries backing away from recent trade deals could face even higher duties. Still, sentiment was aided by expectations that Trump’s new tax policies could boost Chinese exports.
