LIVE MARKETS-What buyers strike? Foreign buyers step up US Treasury purchases

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WHAT BUYERS STRIKE? FOREIGN BUYERS STEP UP US TREASURY PURCHASES

Investors have increased their purchases of U.S. Treasuries this year, with foreign buyers driving most of the increase in intermediate-dated debt auctions, countering fears that they would step away from the market, according to an analysis by JPMorgan.

JPMorgan analysts led by Jay Barry looked at U.S. government data on Treasury auction demand and found that purchases were strong across investor classes in mid-September, and "this strength was disproportionately driven by foreign investor demand, particularly in the 10-year auction.”

Indeed, average demand from end users has picked up across every Treasury maturity this year and is most pronounced in intermediate-dated auctions, with purchases from overseas investors primarily driving this strength, they said.

A sharp increase in Treasury yields in April raised concerns that uncertainty over President Donald Trump’s tariff policies, a worsening budget deficit and other factors were driving buyers away from U.S. bonds.

Government data later showed an unusually large $58 billion drop in Treasury holdings by Canada that month, which was reversed in May. Japan, the largest foreign Treasury holder, has increased its exposure this year. The country owned $1.151 trillion in Treasuries in July, up from $1.062 trillion in December 2024.

The United Kingdom, the second largest foreign holder, has increased its Treasury pile to $899 billion, from $723 billion. China, the third largest foreign holder, has cut its holdings to $731 billion from $759 billion.

(Karen Brettell)

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