FAST FIVE: Japan Overtakes China As Top Foreign Holder Of US Treasuries

Published by on

In recent months, many were wondering if, or rather when, as a result of the ongoing trade war, China would lose its status as the largest US foreign creditor.

Indeed, while in June China added a modest $2.3 billion to its Treasury holdings after three consecutive months of sales, bringing its total to $1.113 trillion.

it was Japan that stole the show with a whopping $21.9 billion in Treasuries added in June, and a whopping $58.9 billion in May and June, the biggest two month increase since June 2013.

As shown in the top chart, the last time Japan held the position as America's largest foreign creditor was May 2017.

China's US treasury holdings have come under increased¬†scrutiny¬†in the trade dispute amid speculation that the Asian nation could sell Treasuries in response, especially after a former Chinese central banker hinted over the weekend that a treasury dump is certainly possible: “The US believes, in a geopolitical point of view, it's being contained by China with China's holding of its sovereign bonds,” said Chen Yuan, former deputy governor of the PBOC.

Categories: ZH