(Photo via CGTN)
China displaced Japan and reclaimed its position of largest foreign holder of U.S. Treasuries after increasing its holdings for five consecutive months, according to data released on Tuesday by the U.S. Department of the Treasury.
The country's total holdings of U.S. bonds, notes and bills in June rose to 1.15 trillion U.S. dollars after it bought 44.3 billion U.S. dollars of Treasuries that month.
Japan, which had overtaken China on the top spot since last October, sold 20.5 billion U.S. dollars of Treasuries and took its total holdings to 1.09 trillion U.S. dollars in the same month.
The two countries account for over a third of the total foreign ownership of U.S. Treasuries, the figures showed.
China's demand for U.S. Treasuries was driven by strong trade flows between China and the U.S., and the country's holdings will probably keep growing in future months, according to Thomas Simons, a senior economist at Jefferies LLC in New York.
"I don't think China's done buying, given their trade balance with the U.S.," Simons said. "The trade flows are going to create more demand for Treasuries."
China's foreign exchange reserves rose to 3.08 trillion U.S. dollars in July with increase for sixth straight month, the country's central bank announced earlier this month.
