According to the U.S. Treasury Department, the U.S. posted a record cross-border investment outflow in June. The total net outflow of long-term U.S. securities and short-term funds such as bank transfers was $153.5 billion, after an inflow of $33.1 billion in May. On the whole, overseas investors withdrew $156.9 billion. At the same time, the overall capital inflow from foreign investors amounts to $3.4 billion. “Right at the beginning of June, you had a very strong sell-off of Treasuries and that’s what frightened a lot of private investors,” Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York, commented on the situation.
The U.S. Treasury Department reports that China’s holdings of U.S. Treasuries declined by $2.5 billion to $1.27 trillion, while Japanese holdings dropped $600 million to $1.22 trillion. China and Japan’s combined share of total foreign holdings of Treasuries has declined since 2004. It dropped to 41.4% in June from 50.9% in August 2004, according to data compiled by Bloomberg. Private investors and government holders sold Treasury notes and bonds worth $20.8 billion in June, the biggest monthly net sales in 2014.
