China’s US Treasury security holdings fell to $1.003 trillion in April, which is the lowest level in 12 years, according to data released by the the US Treasury on Wednesday, June 15, as well as an article published by Reuters. This is $36.2 billion less than the previous month. Some economy analysts have opined that the objective of the reduction may be the diversification of China’s currency holdings.
In April, Chinese sales contributed to a drop in the US treasury’s overall foreign holdings, helping push yields higher. However, yields fell on Thursday, June 16 after the US Federal Reserve announced a 0.75% rise in short-term interest rates to counter inflation. This is the biggest hike since 1994.
Japan also reduced its US Treasury holdings to the lowest level since January 2020, in the midst of the yen’s current exchange rate decline. This might have induced Japanese investors to sell US assets to take advantage of said exchange rate.
Japan still remains the largest foreign holder of US bonds, followed by China.
Translation: Orinoco Tribune
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