Japan’s Treasury Holdings Slide To Three-Year Low On Bonds Rout
The dollar value of U.S. sovereign securities held by official and private investors from the Asian nation fell by $34.5 billion to $1.2 trillion.
(Bloomberg) -- The value of US Treasuries owned by Japanese investors slid by almost 3% in August to the lowest level in three years as a slump in global debt markets hammered down prices.
The dollar value of US sovereign securities held by official and private investors from the Asian nation fell by $34.5 billion to $1.2 trillion, according to the latest figures from the US Treasury. The decline came even as Japanese investors had been net purchasers of US Treasury bonds in August for a second month, separate data showed.
Treasuries have tumbled this year as the Federal Reserve hiked interest rates to combat inflation. The US 10-year yield jumped 54 basis points in August alone to end the month at 3.19%, before climbing to 4.08% last week, the highest since October 2008. The Bloomberg US Treasury index has dropped 14% this year, heading for a record annual decline.
Japan’s Treasury holdings have now dropped by about 10% from a record-high $1.33 trillion in November 2021. The decline is a combination of falling valuation, and the fact that investors in the nation were net sellers of US government securities for nine months through July.
Still, Japan remains the largest foreign holder of US government debt, ahead of China’s tally of $971.8 billion.
Japan’s holdings are down by $104 billion this year, even as the size of the Treasuries market has swelled by more than $1 trillion.
Speculation has been growing that Japan may need to sell some of its Treasury holdings to help fund its intervention to support the sliding yen. Still, the latest holdings data is only for August, while the first intervention from Japan took place in late September.
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