MMC
12-17-2016, 02:28 PM
Looks like China isn't the #1 holder of our debt anymore. Just wont be able to hold leverage over us like they thought they could do. What say ye?
Japan has overtaken China as the biggest owner of U.S. government bonds, the latest sign that China is reducing its Treasury holdings to support its currency, the yuan, which has come under pressure from capital fleeing the mainland in search of investment opportunities.
At the end of October, Japan held $1.13 trillion of U.S. government debt, according to the U.S. Treasury, topping China's holdings, which totaled $1.12 trillion — its smallest helping of U.S. debt since 2010.
China's holdings of U.S. bonds fell by more than $4 billion from September to October and are down roughly $14 billion since October 2015, Treasury data show. China's holdings of U.S. debt have fallen five straight months.
The main reason China is liquidating part of its huge stake in U.S. debt is to prevent a sizable decline in the yuan.
The yuan has lost 7% of its value vs. the U.S. dollar this year. One dollar buys 6.96 yuan, up from 6.49 yuan at the end of 2015. The dollar spiked after Wednesday's interest rate increase by the Federal Reserve and hints from the Fed that three more rate hikes are to come in 2017.
In contrast, Japan's central bank prints money to stimulate its economy, and some of that cash finds its way back into the U.S. government bond market, helping to elevate Japan to the No. 1 spot in foreign holders of U.S. debt, Merk says......snip~
http://www.usatoday.com/story/money/markets/2016/12/16/japan-not-china-biggest-us-debt-holder/95512328/
Japan has overtaken China as the biggest owner of U.S. government bonds, the latest sign that China is reducing its Treasury holdings to support its currency, the yuan, which has come under pressure from capital fleeing the mainland in search of investment opportunities.
At the end of October, Japan held $1.13 trillion of U.S. government debt, according to the U.S. Treasury, topping China's holdings, which totaled $1.12 trillion — its smallest helping of U.S. debt since 2010.
China's holdings of U.S. bonds fell by more than $4 billion from September to October and are down roughly $14 billion since October 2015, Treasury data show. China's holdings of U.S. debt have fallen five straight months.
The main reason China is liquidating part of its huge stake in U.S. debt is to prevent a sizable decline in the yuan.
The yuan has lost 7% of its value vs. the U.S. dollar this year. One dollar buys 6.96 yuan, up from 6.49 yuan at the end of 2015. The dollar spiked after Wednesday's interest rate increase by the Federal Reserve and hints from the Fed that three more rate hikes are to come in 2017.
In contrast, Japan's central bank prints money to stimulate its economy, and some of that cash finds its way back into the U.S. government bond market, helping to elevate Japan to the No. 1 spot in foreign holders of U.S. debt, Merk says......snip~
http://www.usatoday.com/story/money/markets/2016/12/16/japan-not-china-biggest-us-debt-holder/95512328/