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Japan on Course to Replace China as U.S. Largest Creditor

10-17 11:25 Caijing
China had diversified its portfolio since last August to reduce its reliance on the U.S. dollar

Japan is on course to replace China which is reducing its holdings of Treasuries, to become the largest creditor of U.S., according to the U.S. Department of the Treasury.

The department released Treasury International Capital (TIC) data for August 2012 on Tuesday on its website.

The latest data shows Chinese holdings of Treasuries fell 0.2 percent this year through July to $1.15 trillion, while Japan raised its stake by 5.6 percent to $1.12 trillion, on pace to top the list of foreign creditors by November, Bloomberg estimated.

China overtook Japan to be the largest holder of U.S. treasuries in 2008.

Japan purchased $5.3 billion U.S. securities in August, higher than China, which purchased $4.3billion.

According to the data, China remains the largest holder of U.S. treasury securities followed by Japan and America’s 15-nation oil exporters including Ecuador, Venezuela, Indonesia, etc.

By the end of August, total holdings of U.S. treasuries rose to $5.43 trillion from $5.35trillion in the previous month.

That means, two cents and one dime of each one dollar the U.S. borrowed via issuing treasuries were from China. 

China had diversified its portfolio since last August to reduce its reliance on the U.S. dollar as its holdings fell to $1.15 trillion at the end of last year from $1.16 trillion at the end of 2010.

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