China’s U.S. Treasuries Holdings Reach Record

China’s holdings of U.S. Treasuries (BUSY) rose to a record in May even as net selling by private foreign investors in notes and bonds reached an all-time high, government data showed.

China stayed the biggest foreign owner of Treasuries as its holdings increased by $25.2 billion to $1.316 trillion, according to Treasury Department data released yesterday in Washington. Japan, the second-largest holder, cut its holdings to $1.11 trillion. The net long-term portfolio investment outflow was $27.2 billion after a revised decline of $21.8 billion the prior month.

The yield on the 10-year Treasury note reached a two-month high in May as speculation the Federal Reserve may consider tapering its unprecedented bond-purchase program crimped demand for the securities at the same time the Standard & Poor’s 500 Index increased to a record. China has increased its holdings of long-term U.S. government debt in seven of the past eight months of available figures.


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