The two biggest foreign holders of America’s sovereign debt pared their holdings in October, according to the latest data released by the US Treasury Department. Foreign holdings of US Treasuries have fallen to a one year low.

China’s holdings of notes, bills and bonds fell to $1.14 trillion in October compared to $1.15 trillion in the previous month, marking the lowest level since May 2017. The world’s second-largest economy had been slashing its holdings for a fifth consecutive month.

Japan seems to have followed the lead. The second biggest holder of the US state-issued bonds cut its share to $1.018 trillion against $1.028 trillion in September, marking the third consecutive month of reduction.

China is still the biggest foreign holder of the US foreign debt and has been gradually reducing its purchases of the US Treasury bills over the past year as the unceasing trade dispute between Beijing and Washington is putting intense pressure on Chinese stocks and national currency.

After accusing Beijing of unfair trade and stealing US technologies, Washington introduced import tariffs on $253 billion worth of Chinese goods, and threatened Beijing with an additional $267 billion in levies. In response, Beijing imposed tariffs on $110 billion of US goods, hitting mostly US agricultural producers.

As heard on The Hagmann Report