U.S. Treasury bonds hit a new high, but China and Japan are "slimming down."

Speaking of U.S. Treasury bonds, they're like the hot cakes in the international financial market, everyone wants a piece.

But look at the data that came out in July, foreign investors' holdings of U.S. Treasury bonds have surged to a new high of 8.339 trillion U.S. dollars.

Amidst the jubilation, China and Japan, two major players, quietly reduced their positions.

In China's case, they sold off 3.2 billion U.S. dollars worth of Treasury bonds in July, which seems a bit "stingy" compared to the 11.9 billion U.S. dollars they bought in June, but the cumulative reduction of 39.8 billion U.S. dollars within the year is not a small amount.

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Back in the day, we held over a trillion U.S. dollars in Treasury bonds, but now, we're at 776.5 billion U.S. dollars, playing it safe and prioritizing security.

Looking at Japan, the number one "fan" of U.S. Treasury bonds, they also sold off 2 billion U.S. dollars in July, with their holdings hitting a new low for two consecutive months.

Although they're still at the top of the list, this reduction in holdings is quite intriguing.

Why are China and Japan both reducing their holdings?

If you're asking why both are selling off, there are many reasons.

China has been contemplating diversifying its foreign exchange reserves over the years; you can't put all your eggs in one basket.

Look, our foreign exchange reserves increased again in July, reaching 3.2564 trillion U.S. dollars, staying above the 3.2 trillion U.S. dollars mark for seven consecutive months, quite stable.

What does this tell us?

It shows that our economic foundation is strong, and our foreign exchange reserve management is well-handled.

Selling off some Treasury bonds is also for long-term security considerations.

Japan's situation is a bit more complex.

The depreciation of the yen is a headache, and to boost the yen, the Bank of Japan has been working hard, intervening in the market and selling U.S. dollars to buy yen.

Guess what?

The money for this intervention might just be freed up from Treasury bonds.

After all, having reserves at hand means peace of mind, and in critical moments, Treasury bonds can also turn into emergency "silver."

Who's in charge of the market's ups and downs?

Looking at the whole market, it's really bustling.

Among the top ten foreign "debt holders" of the U.S., six countries are reducing their holdings, but four are increasing, especially the Cayman Islands, whose increase is simply staggering, 58.7 billion U.S. dollars, no small amount.

The reason behind this is ultimately the market's expectation of interest rate cuts by the Federal Reserve.

You see, once interest rates are cut, the yield on Treasury bonds will go down, and their attractiveness will naturally weaken.

But on the other hand, the Federal Reserve's interest rate cut is like a shot in the arm for the market, with the stock and bond markets both benefiting.

So, the story behind the new high of U.S. Treasury bonds is quite fascinating.

China and Japan are reducing their holdings, and the market is changing rapidly, but in the end, it's all about countries acting based on their own economic situations and strategic considerations.

We, the onlookers, are just here for the fun and to learn some financial knowledge, which is also great.

After all, in the international financial circle, there are new tricks every day, and we must always keep a curious heart to keep up with the pace of the times!