China, the largest foreign lender to America, increased its holdings of Treasuries in July as speculation the Federal Reserve will slow purchases pushed U.S. bond yields to the highest level in two years.
China’s stake increased by $1.5 billion in July, or 0.1 percent, to $1.277 trillion, after declining the prior month, according to Treasury Department data released yesterday. Treasuries held by Japanese investors, who have the second largest stake in U.S. government debt, rose to a record.
The growth of China’s holdings comes as overseas holdings of Treasuries have grown $16.3 billion, or 0.3 percent, this year, the slowest pace since a 2 percent decline in the first seven months of 2006. Treasuries have lost 3.7 percent this year, according to Bank of America Merrill Lynch indexes, headed for the worst performance since 2009.
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