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The US’s two largest creditor nations increased their holdings of the country’s sovereign debt in February, a report from the US Treasury showed on Monday.

Japan and China both increased their ownership of Treasuries, adding $12.6bn and $8.6bn, respectively, marking the first time that both have added to their holdings in the same month since February 2016.

Japan, which overtook China as the largest holder of Treasuries last October, boosted its holdings to $1.115tn in February. China’s holdings increased to $1.06tn while Belgium, often seen as a proxy for Chinese purchases, reduced its ownership by $7bn to $105bn.

Overall, offshore investors increased their holdings of long-term US assets by $53.4bn in February, up from $5.9bn of purchases a month prior.

Investors have scrutinised the reports over the past year, as Beijing tried to manage capital flight, selling Treasuries to defend the renminbi. It had been a point of consternation for holders of the paper, which have slid in value since the US election.

While the yield on the 10-year Treasury has fallen to its lowest level since November, it remains 40 basis points above where it traded hands on election day. Yields rise as bond prices fall.

Copyright The Financial Times Limited 2017. All rights reserved.
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