Sept 16 – Foreign holdings of U.S. Treasuries declined for a second straight month in July, data from the Treasury Department showed on Wednesday, led by declines in holdings from Japan and China.
Holdings of U.S. Treasuries slid to $9.248 trillion in July from $9.298 trillion in the previous month. But compared with a year earlier, Treasuries owned by foreigners were up 1.5%.
* Japan holdings fell to $1.104 trillion in July, down 1.1% from $1.117 trillion in June. Its holdings dropped for a third straight month. It remained, however, the biggest non-U.S. holder of U.S. Treasuries, with holdings hitting a peak of $1.325 trillion in November 2021.
* The United Kingdom, the second-largest foreign holder of Treasuries, showed a 6.2% increase in holdings to $998.3 billion in July from $939.9 billion the previous month. The UK is widely viewed as a major custody hub for global investors and its flows are often considered as a proxy for hedge fund positioning.
* China’s hoard of Treasuries dropped 2.4% to $618 billion in July from $633.4 billion in June, falling for second consecutive month. China’s holdings in July were the lowest since September 2008, when these tumbled to $618.2 billion.
* China is still the third-largest non-U.S. holder of Treasuries. Its July holdings have fallen by more than 11% on a year-on-year basis.
* On a transaction basis, July saw Treasury outflows of $3.6 billion, from an inflow of $6.2 billion in June.
* U.S. corporate bonds posted inflows of $26.9 billion, down from $39.4 billion in June.
* U.S. equity inflows dropped sharply in July to $3.7 billion, from $181.6 billion in June.
* Overall net capital inflows for July were $83.7 billion, down from $135.5 billion the previous month.
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