Data showed that Japan and China reduced their investments in US Treasury bonds, and Saudi Arabia also reduced investment.
For the third month in a row, Japanese investment in US Treasuries fell, while China recorded a decline below a trillion dollars for the first time in years
And US Treasury data released on Tuesday showed that Japan’s investments amounted to 1.212 trillion US dollars at the end of last May, down from 1.218 trillion dollars in April.
The decline comes in conjunction with the Russian-Ukrainian war and the high financial consequences for countries, in contrast to the rising costs of imports and the growing inflation in various countries of the world, at a time when Japan is facing challenges related to its declining currency.
Likewise, during the past three months, Japan intensified its purchase of energy, amid an electricity crisis that it is experiencing and has put pressure on the performance of companies and factories operating in the country.
As for China, last May, it recorded the lowest value of investments in US debt instruments in more than 12 years, with $980.7 billion.
China’s investment in US bonds and bills declined last May, down from $1.003 trillion in the previous April, and $1.078 trillion year on year.
The decline in Japanese and Chinese investments contrasts with a sharp rise in US bond yields last May, at the top of 10 years, which made it an attractive investment destination.
The bonds and bills market in the US Treasury is the largest global market for this type of debt instruments, with more than 50 countries investing in it.
China’s investments in US bonds are among its hard currency reserve assets, which totaled more than $3.2 trillion, as of last June.
Globally, the total value of global investments in US debt instruments until the end of last May amounted to about 7.421 trillion US dollars, distributed over more than 100 countries around the world.
In third place after China, came the United Kingdom, which recorded a total investment of $634 billion until the end of last May, up from $612 billion at the end of the previous April.
With regard to the Arab countries, the data showed that Saudi Arabia also reduced these investments from $127.3 billion in May 2021 to $114.7 billion in May 2022.
Saudi investments in US debt instruments date back to more than 4 decades, and the Kingdom periodically obtains its returns from investing in US bills and bonds, which are forms of feasible investment.