Japan Extends Lead on China as Top Foreign Holder of Treasuries
Both China and Japan have been negotiating trade deals with the Trump administration.
(Bloomberg) -- Japan remained the biggest foreign owner of U.S. Treasuries in August as China’s holdings continued to drop.
Japan’s holdings of U.S. notes, bills and bonds increased by about $44 billion to $1.17 trillion, the Treasury Department said in a monthly data release Wednesday.
Japan overtook China as the largest non-U.S. holder of Treasuries in June -- the first time it’s held that position since May 2017. China’s holdings decreased by about $6.8 billion to $1.1 trillion.
Overall foreign holdings of Treasuries increased to about $6.9 trillion compared with $6.63 trillion in July.
Both China and Japan -- the world’s second- and third-largest economies behind the U.S. -- have been negotiating trade deals with the Trump administration.
President Donald Trump and his Japanese counterpart Shinzo Abe reached a limited trade agreement in September after meeting at the United Nations General Assembly in New York. The two sides signed the “first stage” of an initial pact earlier this month.
The U.S. and China also agreed Friday on the outlines of a partial trade accord that Trump said he and his counterpart Xi Jinping could sign as soon as November.
Japanese investors have added roughly $135 billion worth of U.S. debt this year as the world’s stockpile of negative-yielding bonds grows. That’s made Treasuries -- which offer some of the highest rates in developed markets -- more attractive to some overseas investors.
While yields on benchmark 10-year Treasuries have plunged to multi-year lows in recent months, the rate on 10-year Japanese government bonds is currently near minus 0.16%.
To contact the reporter on this story: Katherine Greifeld in New York at kgreifeld@bloomberg.net
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alister Bull
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