Japan edges China as largest holder of US Treasuries
Japan edged out China as the largest holder of US Treasuries in June, as optimism about the world’s biggest superpowers minting a trade deal began to fade.
Japan’s holdings of US government bonds rose to the highest level in two and a half years, according to data released by the US Treasury on Thursday. That brought its holdings to $1.12tn.
China reversed a four-month selling streak, increasing its holdings to $1.11tn in June.
In recent weeks, the trade dispute between China and the US reached a new tenor after Beijing retaliated to fresh US tariff threats by allowing its currency, the renminbi, to weaken past the key psychological threshold of Rmb7 per dollar. The Treasury department’s counterpunch — naming China a currency manipulator — sparked fears that any progress towards a trade deal had been scuppered.
On Tuesday, Mr Trump abruptly changed tact, delaying some new tariffs on consumer goods that were set to be subject to 10 per cent tariffs as of September 1.