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.

Bond investors have never been so pessimistic about the world’s second-largest economy, with some now piling into bets on a deflationary spiral. The contrast with the US is stark, where Treasury yields are climbing higher by the day,

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,