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Foreign Grip Loosens on U.S. Treasuries

U.S. investors take up the slack as China and Japan slow purchases of Treasury bonds.

By Daniel Kruger, Bloomberg | Updated on March 24, 2014

Overseas creditors such as China and Japan enabled the U.S. to spend its way out of the recession as they gobbled up 80 percent of the nation’s Treasuries. Now, their holdings are dropping toward the lowest level in a decade, while homegrown investors have picked up the slack.

Excluding Treasuries held by the Federal Reserve, U.S. investors such as mutual funds and pensions have boosted their stakes in the nation’s long-term interest-bearing debt securities since the credit crisis to 33 percent, according to the latest government data. With foreigners buying the fewest Treasuries last year since 2006, domestic buyers have added $33 billion of bonds, according to JPMorgan Chase & Co.

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