Japan and China Lead Record Drop in Foreign Holdings of US Treasuries

The US Treasury's foreign holdings dropped by $72.1 billion in June to $9.299 trillion, marking the third decline in four months.

This sharp reduction was driven by significant declines from Japan and China, with Japan cutting its stockpile of US Treasuries by approximately $26.4 billion to $1.12 trillion and China reducing its holdings by $25.9 billion to $633.4 billion.

The decline in foreign appetite for US debt comes amid rising long-term yields, which reached a multi-decade high of 5.31% on Monday, with the 30-year yield reaching its highest level since June 2007.

Japan's reduction was partly due to sustained pressure on the Japanese yen, prompting repeated interventions by Tokyo and a joint intervention with Washington in late July.