China's Holdings of U.S. Treasuries Drop to Seven-Month Low

  • Holdings by Japan, Brazil, Caribbean nations also scaled back
  • Total cross-border outflow at $175.1 billion in September

China’s holdings of U.S. Treasury securities fell to the lowest level since February as the nation continued to pare its foreign-exchange reserves to support the yuan.

The biggest foreign holder of U.S. government debt had $1.258 trillion in bonds, notes and bills in September, down $12.5 billion from a month earlier, according to Treasury Department data released Tuesday in Washington. Japan, the largest holder after China, also reduced its Treasury portfolio, by $19.9 billion to $1.18 trillion, the lowest level since October 2013.

The report showed the top five foreign owners of Treasuries -- China, Japan, Caribbean banking centers, oil-exporting nations and Brazil -- all lowered their holdings. Countries including Switzerland and Belgium boosted theirs, helping lift total foreign ownership by $3 billion to $6.102 trillion in September, the data showed.

The Treasury’s report, which also contains data on international capital flows, showed net foreign buying of long-term securities totaling $33.6 billion in September. It showed a total cross-border outflow, including short-term securities such as Treasury bills and stock swaps, of $175.1 billion.

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