China and Japan Lead Foreign Buying of U.S. Treasury Debt in July

In total, foreign Treasury debt purchases were up about $50 billion in July versus gains of more than $32 billion in June. It is probably important to realize that private foreign buying was $23.2 billion of that figure in July.

China remained the largest holder of U.S. Treasury debt and Japan is a close second. China’s Treasury debt holdings rose by $2.6 billion and sits right at $1.5 trillion. It has depleted about $17 billion in the month of June, so this was a small gain net-net. Japan’s Treasury holdings grew from $1.11 trillion in June up to $1.117 trillion in July. It is important to realize that China’s buying over the past year is down about 10% while Japan’s buying has been up 20%. Maybe Japan’s central banks hope that all that Yen strength will reverse and then it will make money on the foreign exchange. Maybe.

FULL REPORT

JON C. OGG