As per the data revealed by US Department of the Treasury China has beaten Japan and reclaimed its place of being the largest foreign holder of US bonds. In June the overall holding of US bonds in China increased to 1.15 trillion as it bought 44.3 billion US dollars of Treasuries in the mentioned month.
Also read: Testing started of China’s fastest Skytrain
Last October Japan did overtake China and becoming the largest holder of US treasuries in that month. Now it has sold 20.5 billion US dollars and has 1.09 trillion US dollar treasuries.
China and Japan together make up for over a third of overall foreign holdings of US Treasuries.
As per Thomas Simons, a senior economist at Jefferies LLC in New York, Demand for US Treasuries by China was motivated by the strong trade between the two countries. It is also expected that China’s US holding would continue to rise in future months.
Simons further said, “I don’t think China’s done buying, given their trade balance with the US, the trade flows are going to create more demand for Treasuries.”
China’s central bank announced that the country’s foreign exchange reserves increased to 3.08 trillion US dollars in the month of July.