China 1-year bond yield in line with forecasts

SHANGHAI, Sept 5 - China's Ministry of Finance auctioned 24 billion yuan of one-year government bonds on Friday at a yield of 3.34 percent, in line with forecasts, traders said.

Market forecasts had centred around 3.38 percent and ranged from 3.30 to 3.45 percent.

The auction yield was well below Thursday's indicative secondary market yield of 3.4920 percent bid for one-year government bonds <CN1YTFIX=R>, according to Reuters Reference Rates.

Traders had predicted strong demand at the auction because bond yields in the secondary market have been dropping in the past three weeks in response to easing concerns over consumer price inflation, and due to good money market liquidity. (Reporting by Steven Bian; Writing by Karen Yeung; Editing by Edmund Klamann)

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