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 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,

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.

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 has hit pause on government-bond purchases, citing excess demand. The People's Bank of China has already moved to support the country's flagging currency, through sett