NEW YORK- US Treasuries held by foreigners rose in November for the first time in three months, data from the US Treasury department showed on Wednesday, as the decline in yields enhanced the allure of government debt for investors.
Foreign holdings advanced to $7.273 trillion in November, from a revised $7.131 trillion the previous month. The increase in holdings came after dropping in October to their lowest level since May 2021.
Investors had sold Treasuries the last few months with the rise in rates, which made it unprofitable to hold US debt.
“The reversal makes sense because rates actually peaked in November and continued to move lower,” said Gennadiy Goldberg, senior rates strategist at TD Securities in New York.
The benchmark 10-year Treasury yield started November at 4.061 percent and ended the month at 3.701 percent.
Signs of ebbing inflation prompted the Federal Reserve to adopt a more dovish tone in November. Fed Chair Jerome Powell said on Nov. 30 that the US central bank could ease the pace of interest rate hikes “as soon as December” but warned that the fight against inflation was far from over.
The increase in foreign buying was led by Japan, whose holdings expanded to $1.082 trillion in November from $1.064 trillion in October. Japan, the largest non-US holder of US government debt, reduced its load of Treasuries in the previous four months to defend the struggling yen.
