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.

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 has hit pause on government-bond purchases, citing excess demand. The People's Bank of China has already moved to support the country's flagging currency, through sett