China's Ministry of Finance on Wednesday auctioned 28 billion yuan ($3.7 billion) of six-month bonds at 2.7681 percent, slightly above market expectations of 2.70 to 2.75 percent, traders said.

Traders and analysts had said before the auction that demand was expected to be fairly strong because of ample money market liquidity and banks' tendency to invest in short-term government bonds for cash management purposes.