Foreign holdings of US Treasury securities increased in April, with Japan and the United Kingdom being the primary contributors to the rise.
Data released by the US Treasury Department on Thursday indicated that overseas holdings of US government debt saw a modest rise of $3.9 billion compared to the previous month, following a significant decrease of over $138 billion in March. These figures account for both net sales and purchases as well as valuation adjustments.
The Bloomberg US Treasury Index was largely unchanged in April. This came after it recorded its largest monthly decline of 2024 in March, driven by market concerns that conflict in the Middle East could fuel inflation. According to the Treasury data, foreign investors experienced valuation losses on their holdings of long-term US Treasuries of approximately $39 billion in April.
The data further shows that, in terms of net transactions, foreign investors sold $13.6 billion in Treasury bills while making net purchases of $50.5 billion in long-term US Treasury securities.
Japan, the largest foreign holder of US debt, increased its holdings by $18.3 billion, bringing its total to $1.21 trillion. However, this level remains below that of February. During the spring, including a period in late April, Japanese authorities have been intervening in currency markets, selling US dollars and buying yen to support their domestic currency.
The United Kingdom, the second-largest foreign holder, increased its holdings by $10.6 billion, raising its total to $937.5 billion.
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