Foreign buyers loaded up on U.S. stocks and sold Treasury bonds in July
Photo: Alstair Pike/AFP/Getty Images
Major foreign investors added to their holdings of U.S. stocks but slightly cut their Treasury bonds in July, data from the Treasury department released Tuesday shows.
Of note: China reduced its share in July and foreign holders overall cut their Treasury holdings to $6.63 trillion. China has been gradually paring down its holdings for some time, but most analysts don't see the reduction as part of a strategy to dump Treasuries as a trade war weapon.
- However, China has been looking to reduce its dependence on the U.S. dollar and other financial instruments.
Worth watching: Japan increased its holdings of U.S. Treasuries to $1.13 trillion, a 3-year high, maintaining its spot as the largest single foreign holder of U.S. government debt for a second straight month.
The big picture: Data also showed that foreigners purchased a net $24.26 billion in U.S. stocks, adding to their American equity exposure for a second straight month. Prior to June, foreign investors had sold U.S. stocks for 13 months in a row.
Go deeper: The shrinking U.S. yield premium