Foreign holdings of U.S. Treasuries fell to $9.299 trillion in June, down from $9.371 trillion in May, as Japan, the UK, and China each trimmed their positions. Treasury Department data released Monday showed the decline came even as capital kept flowing into U.S. corporate bonds and equities.
Japan and the UK both pull back
Japan, the largest non-U.S. holder of Treasuries, cut its holdings 2.3% to $1.116 trillion in June, down from $1.143 trillion in May. That remains well below the country's peak of $1.325 trillion, reached in November 2021.
The United Kingdom, the second-largest holder, reduced its stake 1% to $939.9 billion, from $948.6 billion in May. The UK is widely viewed as a major custody hub for global investors, and its flows are often seen as a proxy for hedge fund positioning.
China's stash hits a 2008-era low
China's holdings dropped 4% to $633.4 billion in June, from $659.3 billion in May. That is the lowest level since September 2008, when holdings fell to $618.2 billion. China remains the third-largest non-U.S. holder, but its position is down more than 13% from a year earlier.
Even so, total foreign Treasury holdings were up 2.3% compared with a year earlier in dollar-denominated debt.
Broader capital inflows hold up
On a transaction basis, Treasury inflows slowed to $6.8 billion in June from $56.6 billion in May. U.S. corporate bonds saw inflows of $35.6 billion, down from $52.5 billion the previous month. U.S. equities attracted inflows of $181.4 billion, up from $134.6 billion in February.
Overall net capital inflows for June reached $133.5 billion, compared with $131.5 billion in May.
Source: Investing.com
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