People's Bank of China (PBoC) weakened Yuan, after six consecutive days of strengthening, which has been longest since October, just before International Monetary Fund (IMF), reviewed Yuan to be included in SDR basket.

However, even with last six days strengthening and today's weakening PBoC has kept a tight grip on Yuan. For past six days Yuan has been strengthened by just 0.2% and today PBoC just weakened it by 0.04%. Early January's move in Yuan have spooked Chinese policy makers, When Yuan was depreciating sharply and offshore counterpart was falling faster.

Since then PBoC has taken up numerous steps to keep the lid on Yuan's move.

• It has probably increased its intervention. At least tight move of Yuan suggests so.
• Suspended banks, including standard Chartered over move in two Yuan spread.
• Requested information on short selling positions.
• Drained liquidity via state run banks in offshore market, which pushed Yuan Hibor close to 70% at the peak of depreciations.

Though, today's move has been very small, it is likely that Bank of Japan (BOJ) induced negative rates could be making policymakers to rethink their currency policy.

Officially China has so far rejected possibility of QE or state induced devaluation.

Yuan is currently trading at 6.578 in onshore and 6.605 in offshore market.