Oil futures also broke US$70 a barrel this year, nearly doubling from last year's level on jitters supply may well lag behind demand in the long term.

China's currency regulator said early this year it plans to "optimize the structure" of its record forex reserves as it seeks higher returns.

The State Administration of Foreign Exchange will "actively explore ways of investing foreign exchange more efficiently," Hu Xiaolian, the agency's director said.

But the country won't suddenly change its "set policy" of buying treasuries, top officials including Finance Minister Jin Renqing have said.

However, other market watchers including Standard Chartered's Stephen Green noted China's priority was how to ease the blistering growth in forex reserves which are set to break last year's record.

A strong buildup in forex capital and trade surplus has been igniting tensions between China and western countries which charged the world's fourth biggest economy of making its currency artificially low and demanded that the yuan rise quicker.

China in April allowed pilot banks to help clients buy forex and invest in overseas fixed-income and money market products. But so far no lender has received a license or quota and little details on the process have been provided.

Other factors that could lead to pressure on the yuan to rise are a probable second interest-rate hike caused by overheated investments and the huge inflow of funds, especially to the country's hot property market.

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