NEW YORK, Feb 16 (Reuters) - Foreign official institutions resumed sales of Treasuries securities in December amid speculation reserves were being spent in an effort to stabilize currencies against the dollar, U.S. Treasury Department data released on Tuesday showed.
China and Japan, the two largest creditors of the United States, saw their holdings of U.S. government debt fall to the lowest levels in 10 months and since June 2013, respectively.
“Given the volatility in foreign exchange markets in December, specifically in the Chinese renminbi (yuan), suggests that the selling was mostly related to reserve management and currency policies,” Jefferies & Co money market strategist Tom Simons wrote in a research note on the latest data.
Foreigners sold $29.4 billion in long-term U.S. assets in December, paring total annual purchases to $320.2 billion. In November, they bought $31.4 billion in long-term assets.
Foreign official institutions sold $35.91 billion in Treasuries, compared with $38.36 billion in purchases in November. They unloaded $48.11 billion in U.S. government securities, following a minor $892 million uptick in November.
China’s holdings of Uncle Sam’s debt fell to $1.246 trillion in December, down from $1.265 trillion in November.
Japan’s ownership of Treasuries dropped for a fifth month in a row to $1.123 trillion from November’s $1.145 trillion.
Private overseas investors bought $13.63 billon in Treasuries in December following $36.35 billion in Treasury debt purchases the prior month.
Among riskier assets, foreigners sold U.S. stocks for a fifth consecutive month, totaling $13.76 billion in December, while they bought $4.52 billion in corporate bonds. (Reporting by Richard Leong; editing by Chris Reese, G Crosse)