International
investors were net buyers of U.S. long-term portfolio assets in September as
demand strengthened from China and Japan, the two largest foreign holders of
Treasuries.
The
net long-term portfolio investment inflow was $25.5 billion after a revised
$9.8 billion outflow in August, the Treasury Department said in a statement
today in Washington. China raised its holdings of U.S. government debt by 2
percent and Japan boosted its by 2.5 percent, the department said.
The
data cover the month in which the Federal Reserve decided against cutting back
its bond purchases at a Sept. 17-18 meeting. The Fed buys $85 billion of
Treasuries and mortgage-backed securities each month to keep downward pressure
on borrowing costs. Officials will decide to pare purchases to $70 billion a
month at their March 18-19 meeting, according to the median of economist
estimates in a Bloomberg survey on Nov. 8.
Today’s
report showed China’s holdings swelled $25.7 billion to $1.29 trillion in
September. Japan increased its share by $29 billion to $1.18 trillion, the
figures showed.
The
Treasury’s monthly report on the cross-border flow of portfolio assets captures
foreign buying and selling of U.S. securities as well as American investors’
transactions abroad. It also tracks holdings of Treasuries by countries.
(Source: Bloomberg)