Foreign Treasury Holdings Surge to Record High Even as China, Japan Sell US Debt

Foreign holdings of U.S. debt climbed to an all-time high in May, even as China and Japan, the world’s two largest holders of Treasurys, bucked the trend and reduced their exposure to government bonds. New Treasury International Capital System (TICS) data on July 18 showed that foreign holdings of U.S. Treasurys increased to a record $8.129 trillion, from an upwardly revised $8.04 trillion in April. Japan, the top foreign investor in U.S. debt, reduced its portfolio of Treasurys by $22 billion to $1.128 trillion. Japanese holdings are up 3 percent from a year earlier. Market watchers have been closely following Tokyo’s management of its U.S. government debt holdings as officials try to support the Japanese yen....