Japan overtakes China as largest holder of US Treasuries

PUBLISHED : Friday, 16 December, 2016, 6:23am
UPDATED : Friday, 16 December, 2016, 6:23am

China’s holdings of US Treasuries declined to the lowest in more than six years as the world’s second-largest economy uses it currency reserves to support the yuan. Japan overtook China as America’s top foreign creditor, as its holdings edged down at a slower pace.

A monthly Treasury department report showed China held US$1.12 trillion in US government bonds, notes and bills in October, down $41.3 billion from the prior month. That’s the lowest since July 2010. The portfolio of Japan decreased for third month, falling by $4.5 billion to $1.13 trillion, according to the data.

China’s foreign reserves, the world’s largest stockpile, declined for the fifth straight month in November to $3.05 billion -- the lowest since March 2011 -- amid support for the currency.

The report, which also contains data on international capital flows, showed net foreign buying of long-term securities totaling $9.4 billion in October.

International investors sold $63.5 billion in US Treasuries in October, while foreigners purchased a net $4.5 billion of corporate debt, $20.5 billion in equities, and $32.4 billion in agency debt, according to the report.