Japan Extends Lead Over China As Biggest Foreign Holder Of US Treasurys

Japan resumed its buying of USTs in October (the latest TIC data), while China continued selling…

Source: Bloomberg

China was the second-largest foreign creditor in October, with $1.10 trillion in holdings. That’s the smallest amount since April 2017.

After overtaking China in June, Japan’s holdings of U.S. notes, bills and bonds increased to $1.17 trillion in October from $1.15 trillion a month earlier and are now back near the widest gap to China’s holdings since July 2008…

Source: Bloomberg

Notably, Belgium (often considered a proxy for Chinese offshore holdings), Cayman Islands (hedge funds), and the Saudis all dumped major chunks of their Treasury holdings in October…

• Belgium holds $208.3b of U.S. Treasuries, a decrease of $10b from prior month

• Cayman Islands hold $225.1b, a decrease of $13.6b from last month

• Saudi Arabia holds $178.9b, a decrease of $2.6b from last month

Finally, we note that only Agency debt was bid by foreign entities in October…

• $16.8BN in Treasury sales

• $32BN in Agency purchases

• $6.6BN in Corporate Bond sales

• $4.3BN in Corporate Stock sales

Overall foreign holdings of U.S. debt climbed $1.6 billion to $6.78 trillion in October, but foreign central banks have sold TSYs for 14 consecutive months…

…a total of $348BN in the LTM