Japan, China Sell Most U.S. Debt in at Least 5 Years

Discussion in 'Financial Futures' started by ASusilovic, Oct 17, 2007.

  1. Japan, China and Taiwan sold U.S. Treasuries at the fastest pace in at least five years in August as losses linked to U.S. subprime mortgages sparked a slump in the dollar.

    Japan cut its holdings by 4 percent to $586 billion, the most since a new benchmark for the data was created in March 2000, Treasury Department figures published yesterday showed. China's ownership of U.S. government bonds fell by 2.2 percent to $400 billion, the fastest pace since April 2002. Taiwan's slid 8.9 percent to $52 billion, the most since October 2000.

    Asia's dumping of Treasuries exacerbated the biggest sell- off in U.S. financial assets since Russia defaulted in 1998. The dollar has declined by 7 percent this year to a record low against the euro as the Federal Reserve cut interest rates last month to support the housing market, reducing the yield advantage of U.S. fixed income assets.

    ``People are concerned about the U.S. dollar falling,'' said Hiromasa Nakamura, who helps oversee the equivalent of $25.7 billion at Mizuho Asset Management Co. in Tokyo. ``The Fed will continue to cut rates and the dollar may fall for three to six months.''

  2. ?.......Suss, did you forget to put your "trademark" bold-black-lettered comment at the end of your posting? I might be sounding like a broken-record, whoops, I meant to say a music-CD that's stuck on a speck of dust for saying this but foreign investors buy foreign stuff at market tops and sell out at bottoms. History should repeat itself as it relates to the bond market.

  3. Sorry, I promise I will stick to my "trademark" ! And thank you to remind me that we reached a bottom...I bought some stuff at the long end...heard some "asset realocation" going on...funds out of stocks and into treasuries...confirmation ? :D

  4. And guess what happened while they were dumping treasuries......yields went down, lmao.
  5. Whilst admitting to being a total idiot when it comes to interest rates, bonds and US economy I must say that it makes a lot of sense for Asian central banks to use stock market corrections to lighten their load of US debt as there should be good bids for their paper. Or am I totally wrong?
  6. As seen through the eyes of a trader I'd agree with you, but I think those central banks also need to consider the implication of selling treasuries on the stability of the money supply and exchange rate. This is especially important given the recent fall of the USD.
  7. That's no surprise. Big Ben is getting a taste of what happens when he fucks with the big dogs.

    Dumb shit. He should have NEVER cut rates.
  8. Most US treasuries are bought domestically.

    When you play a Shell Game, you don't let an outside force take control.