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.

On Friday, China's central bank took steps to support the yuan, which has been losing ground, with its depreciation being viewed as a potential tailwind for bitcoin (BTC). The People's Bank of China announced that it will stop purchasing government bonds this month as their demand now overshadows the supply.

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

China's central bank suspended treasury bond purchases on Friday, briefly lifting yields and spurring speculation it is stepping up defence of the yuan currency which has been sliding since the election of Donald Trump as U.

China’s central bank said it will suspend buying government bonds, its latest attempt to temper investor bets on weak economic growth that have undermined the currency and sapped confidence among businesses and consumers.

A statement from the People’s Bank of China (PBOC) from January 10 revealed that the central bank had halted government bond purchases as the supply remained lower than the bonds’ demand. The PBOC mentioned that the purchases would resume after properly monitoring the government bonds market supply and demand.

The People's Bank of China said Friday that it will suspend purchases of sovereign debt this month as the supply of the bonds has fallen short of demand. Christy Tan, investment strategist at Franklin Templeton Institute,