Several foreign governments reduced their holdings of US Treasurys according to the latest data, with analysts suggesting the move may reflect efforts by central banks to buffer against energy-price shocks triggered by the US-Israeli war against Iran.
Japan, the largest foreign holder of United States government debt, shed its Treasury holdings by about $47 billion to $1.19 trillion, according to official data.
"Given increased financial volatility since the start of the war in the Gulf, and resultant pressure on exchange rates, especially in Asia, it is not a surprise that US Treasury holdings by central banks have fallen," Frederic Neumann, chief Asia economist at HSBC, told CNBC.
March data from the Treasury International Capital System — the US government's tracker of cross-border capital flows — showed that India sold $7.6 billion in Treasurys, while Canada reduced its holdings by $6.9 billion and the United Arab Emirates by $5.8 billion.
Overall, foreign holdings of US Treasurys fell by $138.4 billion in March, a 1.5 percent decline from the previous month.
