Foreign holdings of U.S. Treasures fell $72.1bn in June to $9.3tln, U.S.
Treasury data showed, led by reductions from Japan and China. Holdings have
dropped in three of the past four months since a February peak. Treasures
declined amid concerns over large fiscal deficits and inflation remaining above
target. Japan, the largest foreign holder, sold about $26.4bn in June, trimming
its position to $1.12tln. Prolonged yen weakness prompted Japanese FX
intervention, with the U.S. also involved in late July. Strategist Paresh
Upadhyay said Japan’s moves were clearly driven by FX intervention needs; U.S.
Treasury Secretary Bessent participated in July and signaled Tokyo could use
Fed tools to avoid direct Treasury sales, and Upadhyay does not expect Japan to
resume Treasury selling.
