Foreign holdings of US Treasuries fall as Japan, UK and China cut exposure
Foreign investors reduced their holdings of U.S. government debt in June, with Japan, the United Kingdom and China accounting for much of the decline, according to data from the U.S. Treasury Department.
Total foreign-owned U.S. Treasuries fell to $9.299 trillion in June from $9.371 trillion in May, although holdings remained 2.3% higher than the level recorded a year earlier. Japan remained the largest overseas holder despite cutting its holdings by 2.3% to $1.116 trillion, while the UK reduced its position by 1% to $939.9 billion.
China recorded the sharpest decline among the three major holders, cutting its Treasury holdings by 4% to $633.4 billion. The figure represents China’s lowest level of U.S. government debt holdings since September 2008 and marks a decline of more than 13% from a year earlier, although the country retained its position as the third-largest foreign holder.
Despite the decline in Treasury holdings, foreign investment continued to flow into other U.S. assets during the month. Foreign investors added $35.6 billion to U.S. corporate bonds and $181.4 billion to U.S. equities, while overall net capital inflows increased slightly to $133.5 billion from $131.5 billion in May. The figures suggest that while some major foreign holders reduced exposure to U.S. government debt, international investors continued to channel significant funds into other parts of the American financial market.
