U.S. Net Inflow of Long-Term Securities Rises to $31.1 Billion

Foreign investors were net buyers of U.S. long-term portfolio assets in July as China and Japan boosted their holdings of Treasuries.

The net long-term portfolio investment inflow was $31.1 billion after a revised $67 billion outflow in June, the Treasury Department said in a statement today in Washington. Net purchasing of long-term Treasuries by private foreign investors was $49.8 billion compared with selling of a net $40.1 billion the prior month, the department said.

Including short-term securities such as Treasury bills and stock swaps, the total cross-border inflow was $56.7 billion in July, compared with a $19.7 billion outflow the previous month, the report showed.

Official foreign investors were net sellers of $15.9 billion of Treasury notes and bonds in July, the report showed.

Official net purchases of U.S. agency debt were $20.1 billion after buying of $3.9 billion in June, the Treasury said. Private investors were net sellers of corporate debt and equities, the report showed.

The Treasury’s monthly report on the cross-border flow of portfolio assets captures foreign buying and selling of U.S. securities as well as American investors’ transactions abroad. It also tracks holdings of Treasuries by countries.

China stayed the biggest foreign owner of U.S. Treasuries in July as its holdings rose $1.5 billion to $1.28 trillion, according to the Treasury. Japan, the second-largest holder, increased its share by $52 billion to $1.14 trillion.

The Standard & Poor’s 500 Index (SPX) gained 5 percent in July. Investors in U.S. Treasuries lost 0.2 percent that month, according to Bloomberg World Bond (BUSY) Indexes. The Bloomberg U.S. Dollar Index, a gauge of the greenback’s value against 10 major currencies weighted by liquidity and trade flows, lost 1.4 percent in July.

To contact the reporter on this story: Kasia Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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