Japan buys more US debt for 8th month
Source: Agencies |
March 16, 2011, Wednesday
|
Print Edition
Print Edition
JAPAN increased its holdings of United States government debt for an eighth straight month in January.
But the second-largest holder of US Treasury bonds will likely scale back its purchases of foreign holdings, and even sell off some, in coming months to divert money toward rebuilding a nation devastated by a powerful earthquake and an ensuing nuclear crisis.
The Treasury Department said yesterday that Japan boosted its holdings 0.4 percent to US$885.9 billion in January.
Economists said a reduction in Japan's foreign holdings would put some upward pressure on US interest rates. But they cautioned the change would have a limited impact.
The Federal Reserve, which has been buying Treasury securities as part of its efforts to keep interest rates low, would move to counteract any significant increase in rates, they said.
"Any impact from the sales would be short-term and relatively small," said Nariman Behravesh, chief economist at IHS Global Insight.
China, the second-largest holder of US debt, reduced its holdings for a third straight month, trimming them 0.5 percent to US$1.15 trillion.
Overall, foreign holdings of Treasury securities rose 0.3 percent to US$4.45 trillion in January. This data is carefully followed to determine whether foreign countries still have an appetite for Treasury debt at a time of record federal deficits.
But the second-largest holder of US Treasury bonds will likely scale back its purchases of foreign holdings, and even sell off some, in coming months to divert money toward rebuilding a nation devastated by a powerful earthquake and an ensuing nuclear crisis.
The Treasury Department said yesterday that Japan boosted its holdings 0.4 percent to US$885.9 billion in January.
Economists said a reduction in Japan's foreign holdings would put some upward pressure on US interest rates. But they cautioned the change would have a limited impact.
The Federal Reserve, which has been buying Treasury securities as part of its efforts to keep interest rates low, would move to counteract any significant increase in rates, they said.
"Any impact from the sales would be short-term and relatively small," said Nariman Behravesh, chief economist at IHS Global Insight.
China, the second-largest holder of US debt, reduced its holdings for a third straight month, trimming them 0.5 percent to US$1.15 trillion.
Overall, foreign holdings of Treasury securities rose 0.3 percent to US$4.45 trillion in January. This data is carefully followed to determine whether foreign countries still have an appetite for Treasury debt at a time of record federal deficits.
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