(Yicai Global) March 16 -- China, the United States’ second-biggest creditor, increased its holdings of US Treasury bonds by USD22.9 billion in in the first month of this year.

China owned USD1.0952 trillion of US government debt in January, according to US Treasury Department data released yesterday, up from USD1.0615 trillion in December.

China cut its holdings for five consecutive months last year from June to October, when its holdings stood at USD1.054 trillion, the lowest since January 2017

Overall, foreign investors held a total of USD7.1196 trillion in US debt in January, up USD48.8 billion from December and increasing for a second month in a row. Japan remained the biggest owner after increasing its stash by USD25.4 billion.

Ten-year US Treasury bond yields have jumped this year, with inflationary expectations rising rapidly, and exceeded 1.6 percent after US President Joe Biden signed a USD1.9 trillion Covid-19 stimulus package this month.

The global vaccination rollout and strong corporate earnings for the final quarter of last year have reinforced expectations of an economic recovery, prompting the market to start selling Treasury bonds as safe-haven assets, according to analysts.

Editor: Peter Thomas