China's 30-year bond futures extend drop over 3-week

China's 30-year bond futures extend drop over 3-week

China’s 30-Year Bond Futures Extend Drop Over Three-Week Period

China’s 30-year bond futures fell 0.5% on February 25, 2026, marking the largest single-day decline since December 31. The move reflects ongoing pressure on long-dated debt instruments, driven by shifting monetary policy expectations and broader macroeconomic dynamics.

The yield on China’s 30-year benchmark bond rose to 1.89% on July 21, 2025, up 0.01 percentage points from the prior session. Over the past month, yields have increased by 0.05 percentage points, though they remain 0.59 percentage points below their 2014 peak of 5.25%. Analysts note that while yields have trended upward, they remain historically low, with forecasts projecting a decline to 1.86% by the end of the current quarter and 1.78% in 12 months according to market data.

The recent selloff in bond futures aligns with broader shifts in China’s investment strategy. Regulators have encouraged financial institutions to reduce exposure to U.S. Treasuries, prompting a gradual reallocation of reserves into alternative assets. This trend, coupled with geopolitical tensions and concerns over dollar-denominated risk, has influenced domestic bond markets. However, experts caution that China’s trade surplus and limited alternatives for safe-haven assets continue to underpin demand for high-quality debt, both domestically and internationally.

Market participants remain focused on central bank policies and global liquidity conditions. While the Federal Reserve’s potential rate cuts could ease pressure on yields, domestic factors—including fiscal stimulus and currency stability—will likely shape near-term bond market performance.

For now, the three-week decline in 30-year bond futures underscores investor caution, though analysts emphasize that structural demand for long-term debt remains resilient amid evolving global dynamics according to market analysis.