China's Holdings of Treasuries Decline to Lowest Since February

  • Japan's portfolio of U.S. government debt also sinks
  • Cross-border investment outflow in December at $114 billion

China’s holdings of U.S. Treasuries in December fell to a 10-month low, a government report showed in Washington, as the world’s second-largest economy reduced foreign-exchange reserves to support a weakening yuan.

The biggest foreign holder of U.S. government debt had $1.25 trillion in bonds, notes and bills in December, down $18.4 billion from a month earlier and little changed from a year earlier, according to U.S. Treasury Department data released Tuesday. The portfolio of Japan, the largest holder after China, dropped $22.4 billion to $1.12 trillion, the data showed.

For all of 2015, total foreign holdings of U.S. Treasury debt rose to $6.17 trillion from $6.16 trillion, the report showed. Official holdings, which include central banks, fell by $27.2 billion to $4.1 trillion, it showed.

The report, which also contains data on international capital flows, showed net foreign selling of long-term securities totaling $29.4 billion in December. It showed a total cross-border outflow, including short-term securities such as Treasury bills and stock swaps, of $114 billion.

Net selling by foreign governments of U.S. securities including Treasuries, agency debt, corporate bonds and stocks totaled $51.3 billion, the biggest monthly outflow on record for official holders, according to the department.

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