Amid market turmoil triggered by Trump's tariff hikes, the holdings of U.S. Treasury bonds by foreign investors remained near record highs in April.

On Wednesday, June 18 Eastern Time, the U.S. Department of the Treasury released the international capital flow report (TIC), showing that the total holdings of U.S. Treasury bonds by foreign investors reached $9.01 trillion in April, a decrease of $3.6 billion from March, but still the second-highest historical level. The decline was mainly due to net sales by foreign private investors, while official institutions became net buyers of long-term U.S. Treasury bonds.

The changes in holdings showed clear differentiation:

As the largest overseas holder, Japan increased its holdings by $3.7 billion to $1.13 trillion; the UK increased its holdings by $28.4 billion to $807.7 billion, remaining as the second-largest creditor country; China reduced its holdings by $8.2 billion to $757 billion, with its holdings continuously falling below $1 trillion for two consecutive years.

Holdings in the Cayman Islands (a gathering place for hedge funds) decreased by $7 billion; Canada's holdings plummeted by $57.8 billion to $368.4 billion, with analysts attributing it to pressure from Trump's tariffs and border policies.

After Trump announced the tariff increase on April 2nd, financial markets experienced severe fluctuations: the U.S. Treasury market saw its most severe sell-off since 2001, with stocks, bonds, and the dollar experiencing a "triple hit"; the U.S. dollar index fell nearly 4% in April, and the yield of ten-year U.S. Treasury bonds jumped from 3.86% to 4.59%.

U.S. Treasury Secretary Bassent had previously calmed the market, attributing the volatility in the bond market to some investors' deleveraging operations, and emphasized that "demand for U.S. Treasuries from abroad continues to exist."

Vishal Khanduja, head of fixed income at Morgan Stanley, also stated that the claim of "selling off America" was exaggerated, but expected the dollar to present a slow and volatile depreciation trend. (International Finance News)

Original article: https://www.toutiao.com/article/7517424188668346880/

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