The unexpected action is intended to tamp down a potential bubble in the bond market fueled by investors shunning riskier assets like stocks and real estate.

China's central bank said on Friday it has suspended treasury bond purchases, triggering a jump in yields and spurring speculation that the move was aimed at defending a falling currency.

The move comes as long-term yields on Chinese bonds hit fresh lows amid expectations of more monetary policy easing.

The People's Bank of China (PBC) announced on Friday that it has decided to temporarily suspend treasury bond purchases in the open market, starting from this month. The central bank said the decision was made as demand exceeded supply on the government bond market recently,

The announcement by the People's Bank of China that it has suspended treasury bond purchases due to the asset's scarcity highlights the limitations of its resources as it confronts an increasingly challenging economic environment.

China’s central bank expanded its gold reserves for a second month in December, signaling renewed appetite after temporarily pausing purchases last year as prices soared.

Justin Trudeau is resigning as Canadian Prime Minister, and Germany’s solar power industry is in trouble. US bankruptcy filings hit their highest rate in 14 years, and the People’s Bank of China has announced a major policy overhaul as pressures on the economy mount.

China's central bank said on Friday it has decided to suspend treasury bond purchases temporarily due to short supply of the bonds, triggering a jump in yields across tenors. The People's Bank of China (PBOC) said in a statement it would resume bond buying depending on supply and demand in the government bond market.

The People’s Bank of China will issue central bank bills in Hong Kong next week, a tool that is typically used to stabilize the yuan’s exchange rate in the offshore market.