The currency has seen sustained strength this year, with its central parity rate strengthening to a 20-month high against the US dollar on Monday.
China's currency regulator later dismissed the report saying it may be "fake" news, and clarified it was diversifying its foreign exchange reserves in order to safeguard their value.
Prior to market opening on Friday, the People's Bank of China set the yuan midpoint rate at 6.4932 per dollar, breaching the key 6.5 per dollar level, and firmer than the previous fix of 6.5147 on Thursday. The "X" factor was introduced previous year to reduce volatility in the renminbi after the Chinese currency lost around 6.5 percent in 2016. The People's Bank of China (PBOC) took a step to loosen control over the yuan exchange rate on Tuesday, reflecting confidence that depreciation pressure on the currency had eased and it would allow market forces to have greater sway.
In the spot market, the onshore yuan opened at 6.5360 per dollar and weakened to a low of 6.5385 per dollar at one point in morning trade, the softest level since December 28, 2017.
It briefly hit a high of 565 yuan a tonne during the day session - the highest level since September 4 - before paring gains in the latter parts of trade.
Robin Xing, economist at Morgan Stanley, told reporters at a news conference on Thursday he believed that policymakers' aim to keep the yuan stable against its basket while the currency may slightly weaken to 6.7 per dollar by the end of the year.
Economists at ING have forecast the yuan will hold its strength and trade at 6.30 per dollar by year-end. It settled at 6.5277 per dollar as of midday, 0.09 percent weaker than the onshore spot. The global dollar index fell to 92.441 from the previous close of 92.528.
The May 2018 rebar contract closed overnight trade at 3864 yuan a tonne, above Wednesday's day session close of 3,849 yuan a tonne. Negative number indicates that spot yuan is trading stronger than the midpoint.