China Retains Position as Largest Holder of U.S. Debt

China retained its lead over Japan as the largest foreign creditor to America in March, U.S. Treasury Department data show.

China’s holdings of Treasuries fell 0.1 percent in March to $1.25 trillion, while Japan reduced its stake by 0.05 percent to $1.1 trillion, according to data released yesterday. China held 11 percent of the U.S. debt, compared with 9.7 percent by Japan. China’s stake reached a record $1.31 billion in July 2011.

Demand for the U.S. debt from overseas investors slowed in March as U.S. economy showed signs of improvement and as speculation increased that Japan would expand its purchases of its own government securities. The Treasury 10-year note reached 2.08 percent on March 11, the highest this year. Yields declined later in the month on concern financial turmoil in Cyprus would renew the euro region’s sovereign debt crisis.


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