The five-year IRS rose 6 basis points to 2.62 percent at midday, up from Friday's close of 2.56 percent and a three-year intraday low of 2.53 percent also hit on Friday.

Five-year IRS are likely to move in a narrow range this week, while fresh pledges by senior government officials to support the economy spark expectations that China would continue to take easing steps in coming months, traders said.

"The potential for IRS to rise sharply is limited despite today's rebound, as China is now in a monetary easing cycle," said a dealer at a Chinese commercial bank in Shanghai.

"Instead, the market is awaiting another official easing step, and if that happens this month, it could push the five-year IRS to fall to test its three-year low again."

One-year IRS rose 3 bps to 2.40 percent while the 10-year IRS jumped 13 bps to 2.78 percent.

China's economy has slowed sharply this year, with the government posting a gross domestic product growth of 7.6 percent on Friday, its lowest growth in more than three years.

The People's Bank of China (PBOC) cut banks' reserve requirement ratios (RRR) twice, in February and May, and reduced official interest rates twice in June and July.

The official Xinhua news agency on Sunday quoted Premier Wen Jiabao as saying that the government would step up efforts in the second half of the year to support the economy, sparking expectations of further easing, traders said.

MONEY RATES SLIP

Investors expected another RRR cut later this month, especially if money market conditions remain tight, trader said.

Money market rates fell slightly on a liquidity injection on Sunday, one of the dates on which banks will adjust their central bank reserves in line with the RRR.

But short-term lending rates' remained relatively elevated compared to their level for the month following the most recent RRR cut in May, indicating that overall liquidity conditions have yet to improve significantly, traders said.

Banks saw deposit outflows in early July following the rush of short-term deposits that banks typically draw in at the end of each quarter. Now some funds previously locked up in the central bank have been released back into the market.

The benchmark seven-day weighted average bond repurchase rate fell 6.72 bps to 3.2737 percent from Friday's close of 3.3409 percent.

The overnight repo rate edged down to 2.4749 from 2.4933, while the 14-day repo rate inched down to 3.3104 percent from 3.3239 percent.