China and Japan remain the largest foreign holders of U.S. treasury securities, the monthly Treasury International Capital (TIC) data report for May showed Tuesday.
Although the People's Republic of China remained in the lead, holding $1.169 trillion in U.S. treasuries, Japan rose by $15.4 billion between April and May to raise their holdings to $1.105 trillion last month.
Japan has also continued to purchase U.S. treasuries, increasing their holdings by $220.0 billion since July 2011 while China has decreased their holdings by $145.3 billion.
Overall, "foreign residents increased their holdings of long-term U.S. securities in May - net purchases were $50.1 billion. Net purchases by private foreign investors were $19.9 billion, and net purchases by foreign official institutions were $30.2 billion."
The Treasury Department also confirmed U.S. residents decreased their holdings of long-term foreign securities.
Therefore, the net foreign purchases of long-term securities in May were $55.0 billion. After including adjustments, the overall net foreign acquisition of long-term securities is estimated to have been $39.3 billion.
The total of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows in May was $101.7 billion, the report said.
Although the TIC is considered an imprecise measure, many market analysts consider the monthly report as a way to gauge the United States' ability to finance its trade deficit.
by RTT Staff Writer
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