NEW YORK (Reuters) - Overseas investors cut back on purchases of long-term U.S. securities in April, the U.S. Treasury said on Friday, as both public and private accounts unloaded mortgage-backed debt.
The United States attracted a net long-term capital inflow of $25.6 billion in April after drawing $36 billion in March.
Foreigners stepped up Treasury purchases to $37.3 billion from $20.1 billion in March but were net sellers of securities guaranteed by the biggest U.S. mortgage financing agencies to the tune of $14.1 billion. That was more than double the outflow seen from that sector in March.
As for Treasuries, private investors were more avid buyers in April, accounting for 23.4 billion of the total inflow.
China, the largest foreign U.S. creditor, raised its Treasury holdings slightly to $1.146 trillion from $1.144 trillion, while No. 2 Treasury holder Japan cut holdings by $10.2 billion to $1.066 trillion.
Including short-dated assets such as bills, foreigners sold a net $20.5 billion in April, compared with March’s downwardly revised net outflow of $48.6 billion.
Michael Woolfolk, senior currency strategist at BNY Mellon, also noted that U.S.-based investors were less aggressive in selling overseas assets in April.
“Foreign net selling of agency bonds was quite substantial, but the behavior of U.S. investors with regard to foreign bonds was also a factor,” he said. “It looks like the net selling of those positions that we saw in March decreased somewhat.”
Reporting by Steven C. Johnson; Editing by James Dalgleish