China reduced its US Treasury holdings to an 18-year low in August as China continued diversifying its foreign exchange reserves amid geopolitical tensions and concerns over Washington's fiscal outlook. US Treasury Department data released on Friday showed China's holdings fell by US$27.3 billion to US$590.7 billion from US$618 billion in July. Financial data provider Wind put the total at the lowest since August 2008, when China's holdings fell to US$573.7 billion.
Japan, the largest foreign holder of US debt, also sold US Treasuries in August. Japan sold US$35.6 billion, reducing Japan's holdings to US$1.07 trillion from US$1.1 trillion in July. Official data showed overall foreign holdings rose to US$9.33 trillion in August from US$9.25 trillion in July. Increases in holdings by Britain and Canada partly offset sales by Japan and China. Official data showed Britain's portfolio rose to US$1.01 trillion from US$998.3 billion, maintaining Britain's position as the second-largest foreign holder. Canada's holdings increased by US$38.3 billion to US$464.6 billion.
Concerns about Washington's fiscal sustainability deepened in August as total US debt exceeded US$40 trillion. The 30-year Treasury yield remained above 5%. The US Treasury announced in mid-August that the department would at least double buybacks of 10- to 30-year securities to support bond-market liquidity.
The US and Japan jointly intervened to support the yen that month. Japan's Ministry of Finance data showed Tokyo spent 15.4 trillion yen (US$97.2 billion) on the intervention between July 30 and August 26.
Long-term Treasury yields continued rising in recent weeks as investors reacted to the US Federal Reserve's decision to raise interest rates by 0.25 percentage point. The increase was the Federal Reserve's first in over three years and reflected inflation concerns. The 30-year US Treasury yield fell to 5.43% on Friday afternoon after recently trading around a 24-year high. The 10-year yield stood at 5.08%.
China fell to third place among foreign holders of US Treasuries in March last year, behind Japan and Britain. China's gradual but uneven reduction began during US President Donald Trump's first term amid rising tensions and concerns over the weaponisation of the US dollar.
However, China has steadily increased its gold reserves despite China's broader sales of US debt. Gold is widely viewed as a hedge against geopolitical and financial risks. Official data showed the People's Bank of China increased its bullion holdings for the 23rd consecutive month in September. The increase brought the central bank's gold holdings to 77.47 million troy ounces (2,400 tonnes).
China Cuts US Treasury Holdings to 18-Year Low in August
FLASH AIShare
Summary
China’s US Treasury holdings fell to $590.7 billion in August, an 18-year low since 2008, as per US Treasury data. The reduction aligns with reserve diversification amid concerns over US inflation data. Japan sold $35.6 billion in Treasuries, while Britain and Canada added to their holdings. AI + crypto news continues to track global monetary shifts and their impact on digital assets.
Source:Show original
Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of KuCoin. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information.
Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. For more information, please refer to our Terms of Use and Risk Disclosure.