Tuesday, February 16, 2010

Drop in Foreign Holdings of Short-Term Treasury Secrurities

Foreign holdings of short-term U.S. Treasury securities fell in December. China reduced its holdings by $34.2 billion. China at the end of December still held $755.4billion in Treasury securities.

Japan also reduced its holdings of short-term U.S. Treasuries, cutting them by $11.5 billion for a total Treasury positon of $768.8 billion in December.

Note Drudge is featuring a headline:FOREIGN DEMAND FOR U.S. BONDS IN RECORD DROP...

This is simply wrong. The decline was limited to short-term Treasury securities, not bonds. In fact, net foreign purchases of long-term securities were up by $63.3 billion. Of this, net purchases by private foreign investors were $62.6 billion, and net purchases by foreign official institutions were $19.6 billion


  1. The AP news article that this is from is wrong. See Zero Hedge.

  2. Actually, the error by AP is even broader than ZeroHedge realizes, which leads to ZeroHedge making a confusing correction. The AP story has short-term treasury securities and long-term treasury securtities jumbled. My data is from the official Treasury data and not from the AP story. It is correct.

  3. Thanks, though, given the AP confusion. I made my post a little clearer by making sure it is understtod that the $768.8 billion reflects TOTAL Treasury holdings.