Yuan slips to new 16-month low even as PBOC extends support

By Summer Zhen HONG KONG, Jan 10 - China's yuan initially firmed on Friday after the central bank said it would suspend treasury bond purchases, triggering a jump in bond yields, but later fell back to fresh 16-month lows. Spot yuan opened at 7.3270 per dollar and was trading at 7.3317 by midday, 5 pips firmer than the previous late session close and 1.98% weaker than the midpoint. Prior to market opening, the central bank set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1891 per dollar, its weakest since Dec. 27 and 1,247 pips firmer than a Reuters' estimate. LEVELS AT 0447 GMT INST CURR UP/D % DAY' DAY' RUME ENT OWN GE HIGH LOW USD VS. YR-T PREV O-DA IOUS TE CLOS E % Spot 7.33 0 -0.4 7.32 7.33 yuan 17 5 7 24