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Japan’s Decision Shocked the US: Collapse of US Dollar?



Japan’s Decision Shocked the US: Collapse of US Dollar?

In recent years, both Japan and China, who are major holders of U.S. Treasury securities, have significantly reduced their holdings.

China’s investment in U.S. Treasury securities has shown considerable fluctuations over the years, influenced by broader geopolitical, economic, and policy shifts. Starting from a peak in November 2013, when China’s holdings of U.S. Treasury securities reached approximately $1.316 trillion, the trend shifted towards a gradual decline. This peak was during a period when China was actively purchasing U.S. debt to manage its currency value and maintain its export competitiveness.

From 2014 to 2019, the decline in China’s holdings continued, although these still represented a significant portion of U.S. debt held by foreign countries. By December 2019, China’s investment had reduced considerably. The trend of decreasing holdings carried on into the 2020s, aligning with China’s strategy to lessen its dependency on U.S. dollar assets and diversify its foreign exchange reserves.

By December 2023, China’s holdings further declined to about $816.3 billion, accounting for about 10.3% of all foreign-held federal debt, reflecting a strategic adjustment in China’s reserve management, possibly influenced by trade tensions and shifts in the global economic landscape. As of mid-2024, China’s holdings were around $776.5 billion. Despite the reduction, China remains a substantial holder of U.S. debt, though its share has decreased in both nominal terms and as a proportion of total foreign holdings. This reflects ongoing adjustments in China’s financial strategies, including efforts to diversify its reserves in response to global economic changes.

As of September 2024, Japan is the leading international investor in U.S. government bonds, even though its investment levels have seen significant changes within the year. In March 2024, Japan’s holdings were valued at approximately $1.87 trillion, but this amount decreased to around $1.128 trillion by May after a series of sales totaling $59.5 billion, including a notable reduction of $22 billion in May following a $37.5 billion drop in April.

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View 39 Comments

39 Comments

  2. @carmelovirgiliolim2984 on

    US foreign, trade, financial and military policies are not contributing to its economy thereby countries are reducing their investments on US treasury holdings. With all its rhetorics, US deceptions are exposed. And countries are distancing themselves.

  13. @roninnotasheeplikeyou.2631 on

    I was just over in Europe in August & September.

    The vast majority of people I encountered were laughing regarding the two clowns running for president in the US. Harris the cackling hyena & Felon 34 orange Humpty Dumpty tRUMP.

    They are right! 😂😂

  15. @PKS0006 on

    With Strong Leaders like PUTIN MODI XI BB the USA needs to change it's BULLYING tactics as by now the whole World knows the tricks played by USA.

  17. @PKS0006 on

    USA needs to RESET it's thought process as it is 2024 and not 1973 when Henery Kissinger fooled the Whole World and used DOLLAR for HEGEMONY.

  19. @CBaker-b4d on

    The tightening was too aggressive to begin with. The rate hikes have broken an already fragile economy that would have worked out the inflation in the free market. The Fed chose to spark inflation buy napalming the public with stimulus right when the global supply chain was broken and production of good and service basically did not exist during Covid. It was gasoline on the perfect firestorm. Then, instead of letting the inflation work itself out… we hiked rates thousands of times higher than they were in the most massive pounding the Fed has ever given an economy. They chose to break the inflation they created over the backs of the middle class. Now they’re providing a little relief and everyone is acting like it’s going to bring back Covid level inflation and end the world….. Anyone feeling the impact of these economic shifts should consider Crypto long-term trading strategies to protect their assets. My advice to anyone feeling the heat in this inflation, just trade long term more than ever, I have made over 520k from day trading with Sandy Barclays in few weeks, this is one of the best medium to backup your assets incase it goes bearish..

  21. @rapier1954 on

    It could "potentially{ affect the value of the US dollar but it has yet to do so. This is speculation only at this point. No one is shocked and I work watching market indicators daily what you are talking about began many months ago and there has been no impact yet. Any fool can speculate time will tell if you are right..

  29. @philiptan2051 on

    Japan needs money and it has the right to sell all its treasury bonds no matter what effect it might give to the usa's economy. The American treasury bonds are not safe investments because the usa might just stop paying the interests due to lack of money. The moment of usd collapse is getting near each day.

  32. @SagittarianArrows on

    Unfortunately they have waited a very long time. Their first experience was their car industry & how US suppressed them in freely trading. Their national debts clocked up Japan was trapped to dance to the Piped Piper. Know is their chance to bring the karma of the honourable samurai.