"It seems to be a function of what happened to rates during the month of February," said Gennadiy Goldberg, senior U.S. interest rate strategist at TD Securities in New York. "It does seem as though foreign investors were looking to lighten their exposure to U.S. Treasury debt during the month." The benchmark 10-year Treasury yield hit an almost four-month high of 4.091% on March 2, after falling as low as 3.333% on Feb. 2. The yields have since fallen on ebbing inflation and concerns about a slowing economy as a result of higher rates, and on an expected tightening of credit following the collapse of two regional banks in mid-March. Japan remains the largest non-U.S. holder of Treasuries with $1.082 trillion in February. That was down from $1.104 trillion in January. Data also showed holdings of China, the second biggest non-U.S. holder of Treasuries, fell once again to $848.8 billion, from $859.4 billion in January. China's holdings fell for a seventh straight month to the lowest since May 2010 when it had $843.7 billion. On a transaction basis, Treasuries posted foreign inflows of $55.6 billion in February, down from $50.9 billion in January. Treasuries have seen inflows from foreign investors for 10 straight months. (Reporting by Karen Brettell; Editing by Mark Porter and Richard Chang)
(Adds quote, details of data)
NEW YORK, April 17 (Reuters) - Foreign holdings of U.S.
Treasuries fell in February, when yields were steadily marching
higher, data from the U.S. Treasury Department showed on Monday.
Offshore holdings fell to $7.344 trillion in February from
$7.402 trillion the previous month. Compared to a year earlier,
Treasuries held by foreigners fell by around 4.7%.
Yields jumped in February as high inflation readings and
stronger-than-expected economic data increased concerns that the
Federal Reserve will need to hike rates higher and for longer.
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