China increased US debt holdings for first time in six months in November despite overall decline
- Chinese holdings rose to US$1.063 trillion in November from US$1.054 trillion in October, with China remaining the second largest non-US owner of US debt
- Foreign investors held US$7.053 trillion in US government debt in November, down from US$7.068 trillion the previous month
Foreign holdings of US Treasuries declined for a fourth straight month in November, although China increased its load of American debt for the first time in six months, data from the US Treasury department showed on Tuesday.
Japan’s holdings, the largest non-US holder of Treasuries, slipped to US$1.260 trillion in November from US$1.269 trillion in October, the fourth consecutive monthly decline.
Ben Jeffery, rates strategist, at BMO in New York, said going forward it would be interesting to monitor Japanese holdings of US Treasuries given the weakness of the US dollar versus the yen.
“The yield available to Japanese investors when they hedge Treasuries back to yen has become increasingly attractive because of the dollar’s weakness,” he said, which could well prompt them to buy US debt again.