The unexpected action is intended to tamp down a potential bubble in the bond market fueled by investors shunning riskier assets like stocks and real estate.

China’s central bank expanded its gold reserves for a second month in December, signaling renewed appetite after temporarily pausing purchases last year as prices soared.

The People's Bank of China (PBC) announced on Friday that it has decided to temporarily suspend treasury bond purchases in the open market, starting from this month. The central bank said the decision was made as demand exceeded supply on the government bond market recently,