China's 10-Year Government Bond Yield Falls Below 2% for the First Time

Forex - China's 10-year bond yield has fallen to a record low as investors increase their bets that authorities will further ease monetary policy to support the struggling economy. The benchmark bond yield, which has declined for the fifth consecutive week, fell two basis points to 1.9995%, surpassing the significant psychological level of 2%. The yield on 30-year bonds also decreased by four basis points to 2.17% after dropping below that of its Japanese counterpart for the first time in approximately twenty years last month. Investor interest in Chinese bonds has emerged as a series of data continues to show an uneven recovery in the world's second-largest economy, from improvements in factory activities to the collapse of the housing sector. This situation also reflects concerns about the possibility of increased trade tensions with the U.S. during Donald Trump's second presidential term.