FAST FIVE: Japan Increases Lead Over China As Largest Foreign Holder Of U.S. Treasurys

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Japan Increases Lead Over China As Largest Foreign Holder Of US Treasurys For much of 2019, 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 saw its holdings decline by a modest $2 billion, bringing its total to $1.111 trillion from $1.113TN.

China's US treasury holdings have come under increased scrutiny in the trade war amid speculation that the Asian nation could sell Treasuries in response, especially after a former Chinese central banker recently suggested 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.

“That means the US is not completely without weakness.” And while China has yet to activate the nuclear option, at least we now know which country's retirees are the biggest US Treasury bagholders.

Overall foreign holdings of US Treasuries dropped to $6.63 trillion compared with $6.64 trillion in June.

Categories: ZH