UPDATE 1-Foreign demand for U.S. Treasuries wanes but Belgium strong buyer

Thu May 15, 2014 10:46am EDT

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(Adds U.S. Treasury purchasing data)

NEW YORK May 15 (Reuters) - Foreign capital inflow into U.S. Treasuries declined in March after strong numbers the previous month, but support for this asset class came mainly from an unconventional buyer -- Belgium.

Holdings of U.S. Treasuries in Belgium rose a net $40.2 billion in the month. Over the last five months, Belgium's buying totaled about $201.1 billion.

This euro zone country is now the third largest holder of U.S. Treasuries with $381.4 billion, after China and Japan.

"This is consistent with the recent trends and continues to suggest another country is running their purchases through a Belgium-based custodian," said Ian Lyngen, senior government bond strategist, at CRT Capital in Stamford, Connecticut.

Overall, Treasuries posted net inflows of $25.9 billion two months ago, from $92.5 billion in February.

In total, foreigners bought $4 billion in long-term U.S. financial assets in March, compared with revised inflows of $90.3 billion the previous month.

Including short-dated assets such as bills, overseas investors sold $126.1 billion in March, reversing inflows of $175.9 billion in February. (Reporting by Gertrude Chavez-Dreyfuss, Editing by W Simon)


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