November 18, 2014 / 9:16 PM / 5 years ago

Foreign inflows into U.S. assets in September largest in 4-1/2 years

NEW YORK (Reuters) - Foreign purchases of long-term U.S. securities in September were the largest in more than four years, with inflows in all major asset classes, data from the U.S. Treasury Department showed on Tuesday.

Net purchases of long-term U.S. assets including stocks and bonds totaled $164.3 billion in September, after a $52.1 billion inflow in August. September’s inflows were the biggest since March 2010. However, including short-dated assets such as bills, foreigners sold $55.6 billion in U.S. assets, the first outflow since June.

Overseas investors bought U.S. Treasuries for a second straight month. September inflows into U.S. Treasuries of $48.1 billion were the highest since February, even though benchmark U.S. 10-year note yields, which move inversely to price, ended the month higher at 2.5 percent.

The dollar in September, on the other hand, was on a run, notching its third monthly gain.

Data also showed China’s holdings of U.S. Treasuries declined to $1.266 trillion in September, from $1.269 trillion the previous month. China is still, however, the largest holder of U.S. government debt.

Japan’s Treasuries holdings also fell to $1.221 trillion, from $1.230 trillion in August, while Belgium’s dropped to $353.9 billion.

The September report also showed inflows in equities to the tune of $4.4 billion, from net sales of $2.1 billion the previous month. It was the first inflow in stocks in three months.

Investors also bought U.S. corporate bonds totaling $20.7 billion, the first monthly inflow in six months. In August, foreigners sold $7.3 billion in corporate bonds.

Agency bonds continued their winning streak in September, garnering net inflows of $20.96 billion. Foreigners bought agencies for a fifth straight month.

Reporting by Gertrude Chavez-Dreyfuss; Editing by James Dalgleish and David Gregorio

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