China stepped up its support for the yuan as the managed currency weakened toward a policy no-go area — the edge of its allowed trading range against the dollar.

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 expanded its support for the beleaguered yuan with a plan to issue a record amount of bills in the Hong Kong market to mop up excess liquidity.

The People’s Bank of China will issue central bank bills in Hong Kong next week, a tool that is typically used to stabilize the yuan’s exchange rate in the offshore market.