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Japan and China Dumped US Treasuries Before Trump’s Election Win from
Japan and China Dumped US Treasuries Before Trump’s Election Win
China Sheds Nearly $100 Billion in US Treasuries
...Beijing’s holdings of Treasurys fell by $98.6 billion in October, the biggest monthly decline since 2015.
...The move suggests that China is continuing to diversify its foreign exchange reserves away from the US dollar.
...China's holdings of US Treasuries have fallen by more than $500 billion since their peak in 2013.
Japan Sells $13 Billion in US Treasuries
...Japan sold $13 billion in US Treasuries in October, the first monthly decline since May 2015.
...The move suggests that Japan is also starting to diversify its foreign exchange reserves away from the US dollar.
...Japan's holdings of US Treasuries have fallen by more than $200 billion since their peak in 2012.
Implications for the US Economy
...The sale of US Treasuries by Japan and China could have a number of implications for the US economy.
...First, it could lead to higher interest rates in the US.
...When foreigners sell US Treasuries, they are essentially selling US dollars. This can lead to a decrease in the demand for the US dollar, which can lead to a decrease in its value.
...A decrease in the value of the US dollar can make it more expensive for the US to import goods and services. This can lead to higher inflation in the US.
...Second, the sale of US Treasuries by Japan and China could lead to a decrease in the US budget deficit.
...When foreigners buy US Treasuries, they are essentially lending money to the US government. The US government uses this money to finance its budget deficit.
...If foreigners stop buying US Treasuries, the US government will have to borrow money from other sources, which could lead to higher interest rates.
...Higher interest rates can make it more expensive for businesses to borrow money to invest and expand. This can lead to slower economic growth in the US.
Conclusion
...The sale of US Treasuries by Japan and China is a significant development that could have a number of implications for the US economy.
...It is important to monitor this situation closely and to be aware of the potential risks.
