China 10-yr bond sale yield in line with forecast

SHANGHAI, June 17 - China's Ministry of Finance auctioned 28 billion yuan of 10-year government bonds on Wednesday at a yield of 3.09 percent, traders said, in line with market forecasts.

Market forecasts had centred around 3.11 percent and ranged from 3.05 to 3.18 percent.

The auction yield came in slightly below Tuesday's indicative secondary market yield of 3.1424 percent bid for 10-year government bonds <CN10YTFIX=R>, according to Reuters Reference Rates.

Traders had predicted strong demand from big, cash-rich banks and insurers, which invest in long-term bonds to match their long-term cash flows and which will not be seriously affected by any liquidity tightness that may emerge with the expected resumption of public equity offers later this month. (Reporting by Qu Weizhi and Karen Yeung; Editing by Edmund Klamann)