Foreign holdings of US Treasury debt rise in May

AP Economics WriterJuly 16, 2014 

Foreign Holdings

FILE - In this July 1, 2014 file photo, passers-by use cellphones in front of electronic stock board of a securities firm in Tokyo. The Treasury Department on Wednesday, July 16, 2014 reported that total foreign holdings rose 0.3 percent to $5.98 trillion, up from $5.96 trillion in April.

KOJI SASAHARA, FILE — AP Photo

— Foreign buyers of U.S. Treasury securities increased their holdings in May to another record high.

The Treasury Department reported Wednesday that total foreign holdings rose 0.3 percent to $5.98 trillion, up from $5.96 trillion in April.

China, the top foreign buyer of U.S. Treasury debt, increased its holdings for the first time since January, raising them by 0.6 percent to $1.27 trillion. Japan, the second-biggest foreign buyer, increased its holdings by 0.9 percent to $1.22 trillion.

Russia reduced its Treasury holdings by 4.3 percent to $111.4 billion and well below the recent high of $149.9 billion last October.

Foreign demand for Treasury debt is expected to stay strong this year, helped by a congressional agreement to avoid a fight over the U.S. debt ceiling until March 2015.

A standoff in August 2011 rattled financial markets and the political gridlock led the credit rating firm Standard & Poor's to downgrade its AAA rating of U.S. debt for the first time in history.

The monthly Treasury report showed that holdings by Belgium, the No. 3 investor in U.S. Treasurys, fell 1.1 percent to $362.4 billion. Holdings by the Caribbean banking centers, including the Bahamas, Bermuda and the Cayman Islands, rose 0.8 percent to $310.8 billion.

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