Foreign Central Banks Dump $72B in Treasuries; Japan Raises USD for Yen Intervention
According to data from the Treasury released in August, foreign investors cut their US Treasury holdings by $72 billion in June, bringing the total down to $9.30 trillion. In that month, foreign official entities divested $70 billion, amounting to a total of $233 billion since February, resulting in their holdings dropping to $3.78 trillion, the lowest level since February 2024. Japan was the most significant seller, offloading $26 billion in June and $123 billion since February to bolster the yen. Additionally, Mainland China and Hong Kong together reduced their holdings by $42 billion in June. The seven largest financial hubs experienced a decline of $11 billion, totaling $3.23 trillion. Canada, however, increased its holdings by $24 billion, while France, Norway, the UAE, and Israel all saw reductions. Long-term Treasury yields remained steady at 4.45%.
Key facts
- Foreign holders shed $72 billion of Treasury securities in June, bringing total foreign holdings to $9.30 trillion.
- Foreign official holders (central banks and governments) shed $70 billion in June and $233 billion since February, bringing their holdings to $3.78 trillion, the lowest since February 2024.
- Foreign private-sector holdings remained essentially unchanged at a record $5.52 trillion.
- Japan reduced its Treasury holdings by $26 billion in June and $123 billion since February, likely to fund yen interventions.
- Mainland China and Hong Kong combined shed $42 billion in June and $84 billion over the past year.
- The seven largest financial centers (UK, Cayman Islands, Belgium, Luxembourg, Ireland, Switzerland, Singapore) saw combined holdings dip by $11 billion to $3.23 trillion.
- Canada increased holdings by $24 billion to $460 billion; France decreased by $3 billion to $390 billion; India increased by $5 billion to $186 billion.
- Market value was not a factor in June as long-term yields were unchanged (10-year at 4.45%).
Entities
Institutions
- Federal Reserve
- Treasury Department
- Bank of Japan
- People's Bank of China
- Hong Kong Monetary Authority
- Euroclear
- Wolf Street
Locations
- Japan
- China
- Hong Kong
- United Kingdom
- Cayman Islands
- Belgium
- Luxembourg
- Ireland
- Switzerland
- Singapore
- Canada
- France
- Norway
- India
- Brazil
- Saudi Arabia
- South Korea
- United Arab Emirates
- Israel