Foreign holders trim US Treasury holdings in March

Data showed seven of the top 10 foreign holders of US government debt trimmed their holdings of US Treasurys in March. Foreign governments are selling US Treasury bonds to stabilize their currencies amid the energy shock and financial volatility triggered by the Iran war. Japan reduced its holdings to protect its currency.

China trimmed its position in response to short-term volatility, though it has been steadily reducing its exposure to US dollar assets for years. Saudi Arabia also shed holdings as the war has stopped the oil-for-dollars trade. US Treasury yields are flirting with levels last seen in 2007, owing to a global bond selloff driven by fears of inflation and sustained high oil prices.