China sells 50-year sovereign bonds at 2.546%: trader

China’s Ministry of Finance conducted a 50-year ultra-long-term special sovereign bond auction on May 23, 2025, pricing the issue at an average yield of 2.1%. This marked the first increase in yields for the 50-year tenor since February 2022, reflecting shifting investor sentiment amid policy support and easing U.S.-China trade tensions, which reduced demand for long-term safe-haven assets. The yield exceeded the previous day’s closing price of 2.0175% for comparable 50-year bonds and was 19 basis points higher than the renewed bonds issued in February.

The auction, which raised 50 billion yuan (USD 7 billion), occurred alongside sales of 10-year and three-year treasury bonds, which saw lower yields of 1.67% and 1.46%, respectively. The rise in long-term yields contrasted with relatively stable conditions in China’s broader bond market, where 10-year note yields increased modestly to 1.7% from 1.63% since May began. Globally, sovereign yields have surged due to concerns over budget deficits, with U.S. 10-year Treasuries climbing to 4.53% and Japanese 10-year notes reaching 1.55%.

Analysts attributed the muted demand for China’s 50-year bonds to supply pressures and uncertainty around U.S. tariff policies, though they noted that monetary stimulus measures continue to underpin liquidity. Treasury bond futures initially dipped but rebounded after auction results were released, signaling improved market sentiment. While short-term funding pressures persist, experts remain confident that central bank interventions will maintain adequate liquidity, limiting the risk of a major bond market correction.