China's central bank surprised markets by injecting 9.5 billion yuan ($1.4 billion) via reverse repos, despite already flush liquidity conditions. The People's Bank of China added the most cash since late March, signaling tolerance for abundant funds as money-market rates hover near three-year lows. Bond markets responded positively, with futures on 10-year government debt heading for an eighth consecutive day of gains.

The injection comes ahead of Friday's launch of ultra-long special government bond sales under Beijing's 1.3 trillion yuan stimulus package. Authorities will offer 119 billion yuan of 20- and 30-year notes, with the 30-year amount marking a record. The PBOC's move reflects a strategy to maintain low funding costs and ensure smooth government financing, helping absorb the massive bond supply without disrupting market stability.

China's bond rally has outperformed peers amid geopolitical tensions, with 30-year yields dropping 13 basis points this month to 2.22%. Analysts suggest the bond rally may be only "halfway through," with some forecasting the 30-year yield could fall to as low as 2.15%. The central bank appears comfortable with rising leverage in the bond market, prioritizing economic support through accommodative monetary policy.