China, Japan and India are selling U.S. foreign debt: the dollar's dominance is slipping
China and Japan, the two largest holders of us treasuries, reduced their bond holdings in August, according to the latest data released by the us Treasury Department on Thursday.
Russia today television October 17 published titled "sino-japanese sell treasuries, dollar decline," the report said, China's holdings of us sovereign debt from $1.171 trillion in July fell to $1.165 trillion in August, this is the world's second largest economy in the trade tensions with the United States to support their currencies since the reduction of the third month in a row. China remains the largest foreign holder of us treasuries, followed by Japan, a longstanding us ally.
Tokyo reduced its holdings of U.S. treasuries to $1.029 trillion in August, the lowest level since October 2011, the report said. Japan held $1.035 trillion in July. Japanese investors decided in August to buy British bonds and sell U.S. and German bonds, according to the latest data from Japan's ministry of finance. Japan reported net debt payments of $5.6 billion.
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According to the report, paying off us treasuries, one of the world's most actively traded financial assets, has recently become a major holder. Russia sold 84 per cent of its holdings this year, with a total of just $14.9bn remaining as of June. With relations between Moscow and Washington at their lowest point in decades, the Russian bank explained that the decision was based on financial, economic and geopolitical risks.
Turkey and India followed suit, the report said. Like Russia, Turkey withdrew from the list of the top 30 holders of us bonds after clashes with Washington over Turkey's attempted military coup two years ago. While India is still in the top 30, it has reduced its holdings of us treasuries from $157bn in March to $140bn in August.
Goldman sachs said earlier this week that U.S. sanctions and tariffs against major economies such as Russia, China and Iran have driven down the dollar's share of global central bank reserves. Meanwhile, imf data confirmed that the us dollar's share of global central bank reserves fell to 62.3 per cent between April and June, while the share of the euro, yen and renminbi in allocated reserves rose.