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China’s Yuan, Bonds Tank in Tandem Amid Fears on Foreign Selloff

China’s government bonds and the yuan slid in tandem, amid speculation that overseas hedge funds have stepped up liquidating the country’s assets after a rout in shares deepened.

The yield on the most actively traded 10-year government bond rose seven basis points to 2.94% Tuesday afternoon, the most since in a year. The offshore yuan fell as much as 0.6% to 6.52 per dollar, through the key 6.5 level for the first time since April. Stock benchmarks in China and Hong Kong extended declines, with the Hang Seng Index plunging as much as 5.5%.