China Eases Cash Injections as Government Bonds Steady

China dialed down its short-term cash injections to the banking system, as the government bond market steadied following this week’s steep losses, Bloomberg News reported. The People’s Bank of China added a net 9 billion yuan ($1.3 billion) of seven-day liquidity via its open-market operations, compared with 123 billion yuan on Thursday, after a rare selloff in the onshore bond market spooked fixed-income investors. The yield on 10-year bonds climbed two basis points to 2.82% as of 9:33 a.m. local time. It fell four basis points Thursday. Chinese bonds came under pressure this week as a tweaking of some Covid-Zero restrictions and measures to address the property downturn lifted risk sentiment. Yields surged amid reports of a flood of withdrawals from fixed-income products and regulators asked banks to report on their ability to meet short-term obligations. Read more.