2025.12.1105:58:39UTC+00China 10Y Yield on 3-Session Declines

China’s 10-year government bond yield has decreased to approximately 1.83%, marking its third consecutive decline and reaching a new one-week low. This drop comes amid expectations that Beijing might introduce interest rate cuts. Analysts at Societe Generale anticipate that China's benchmark bond yields could potentially reach their lowest-ever levels next year. It is suggested that the People's Bank of China could implement a rate reduction of up to 20 basis points in 2026 to stimulate growth, while strategically managing bond yields to maintain investor interest in government debt. These developments introduce a layer of complexity to China's monetary policy outlook, especially as the Politburo has indicated a cautious approach towards stimulus measures, despite commitments to bolster domestic demand and support broader economic growth in 2026. Attention is now focused on the forthcoming Central Economic Work Conference, where policymakers are expected to set growth targets for 2026 and delineate the key priorities that will shape China’s economic policy for the upcoming year.