Japan and China reduce their holdings of US Treasuries to the lowest levels in several years

Japan and China reduced their holdings of US Treasuries in May to multi-year lows, data from the US Treasury showed on Monday.

The data indicated that Japan’s holdings fell to $1.212 trillion, the lowest level since January 2020, when the country’s balance of US Treasuries was $1.211 trillion.

In April, Japan’s holdings amounted to $1.218 trillion.

The data showed that China’s holdings of US government debt fell to $980.8 billion in May, the lowest level since May 2010 when those holdings were $843.7 billion.

In April, China’s holdings amounted to $1.003 trillion.

The world’s second largest economy reduced its holdings of US Treasuries for the sixth month in a row.

Although China and Japan sold US Treasuries in May, yields fell.

The benchmark 10-year Treasury yield started in May at %2.996 percent and fell about 15 basis points to %2.844 by the end of the month.

Total foreign holdings in US Treasuries fell to $7.421 trillion in May, the lowest since May 2021, and down from $7.455 trillion in April.

In other asset classes, foreigners sold $9.15 billion in US stocks in the fifth straight month of exit, after sales of $7.04 billion in April.

US corporate bonds drew $4.46 billion in inflows in May, compared with $22.5 billion in inflows the previous month.

Foreigners have been net buyers of US corporate bonds for five consecutive months.

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