With the strongest daily yuan fixing since November 2022, along with state banks sustaining dollar-selling, and the adjustment of a cross border financing rule to further discourage yuan sell pressure all in combination, the People’s Bank of China was able to forcefully rally the yuan significantly higher.

In addition, China's USD-denominated junk bond market sees its worst three-day plunge so far this year, as property developers Wanda Group, as well as two state-backed firms signal imminent default.

Weston Nakamura ties the efforts of the PBOC to uplift the yuan with the severe volatility in China's USD-bond markets, and points to China's alarming behavior that something of utmost concern seems underway.

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