Ministry of Finance reports rise in 5-year bond yield

China paid the highest yield at a five-year bond auction since August 2011 on speculation that demand waned as the supply of cash tightened. The Ministry of Finance sold at least 30 billion yuan ($4.9 billion) of notes at an average yield of 3.7 percent, according to a statement on its website.

That compares with the 3.58 percent median forecast in a Bloomberg News survey on Tuesday.

The seven-day repurchase rate, a gauge of interbank funding availability, climbed 6 basis points to a three-week high of 4.2 percent, a daily fixing published by the National Interbank Funding Center showed.

"Liquidity has been tightened for most banks, and only the big guys were lending out in the money market," said Becky Liu, a senior rates strategist at Standard Chartered Plc in Hong Kong.