▲ U.S. Department of the Treasury
Close allies of the United States, including South Korea and Japan, are no longer buying U.S. Treasuries in large amounts, Bloomberg reported today (October 28), analyzing data from the U.S. Department of the Treasury and the Department of State.
According to the analysis, America's closest allies net purchased 174.3 billion dollars (approximately 233 trillion won) in U.S. Treasuries, excluding short-term bills with maturities of one year or less, between January and August of this year.
This is the smallest volume for the same period since 2021.
It marks a decrease of more than 60 percent compared to the same period last year.
This shift was particularly pronounced in Asian nations.
It is drawing attention especially because Asian countries are reducing their investment share in U.S. Treasuries despite recording large current account surpluses.
Japan, the largest holder of U.S. Treasuries, net purchased a mere 389 million dollars during this period.
This represents a 99 percent drop compared to the same period last year.
South Korea net sold 23.8 billion dollars.
This is the largest net sale on record since related statistics began being compiled in 1977.
Taiwan also showed a net sale.
Bloomberg speculated that a combination of multiple factors may be at play, including weaker currencies, rising domestic interest rates, increased demand for equities, and anxieties surrounding U.S. policies.
Masahiko Loo, senior fixed-income strategist at State Street Global Advisors, said, "Foreign investors are not disappearing from the U.S. Treasury market, but the 'automatic buyers' are gone." He added, "As the situation in the U.S. becomes increasingly unpredictable, the strategy of continuously holding or automatically reinvesting in U.S. Treasuries has become difficult to justify."
(Photo: AP, Yonhap News)
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