Foreign Governments Sell Treasuries at Record Pace in Januaryby
Foreign governments and central banks sold long-term U.S. Treasuries at a record pace to start 2016, Treasury Department data showed Tuesday.
Net sales were $57.2 billion during January, exceeding the $48.1 billion rate of the previous month, according to figures released in Washington. It’s not clear from the data which countries were selling: While holdings attributed to China, the largest foreign owner of Treasuries, fell by $8.2 billion from December, the world’s second-biggest economy said earlier this year that its foreign-exchange reserves had declined by $99 billion in January.
Despite the sales in the latest Treasury data, demand for U.S. government debt had pushed the yield on 10-year Treasuries down to 1.92 percent at the end of January from 2.27 percent a month earlier, as China’s actions on its currency and stock market rattled global financial markets. The nation has been paring its foreign-exchange reserves to prop up the yuan.
Japan, the largest holder after China, showed an increase in holdings of Treasuries of about $900 million, to $1.12 trillion.
The Treasury’s report, which also contains data on international capital flows, showed net foreign selling of long-term securities totaling $12 billion in January. It showed a total cross-border inflow, including short-term securities such as Treasury bills and stock swaps, of $118.4 billion.