Chart of the Day: China Cuts U.S. Treasury Hoard for Third Straight Month

China’s U.S. Treasury holdings shrank for a third month in August, dipping to the lowest point since June 2017, amid an ongoing trade war between the world’s two largest economies and a summer of currency volatility.

China cut its holdings of U.S. Treasury bills, bonds, and notes to $1.165 trillion, down $5.9 billion from the month before, according to data released by the U.S. Treasury Department on Tuesday.

China is the largest foreign holder of U.S. treasuries, accounting for about 18.5% of the foreign holdings in August.

The second-largest foreign holder, Japan, decreased its Treasury assets by $5.6 billion from a month earlier to around $1.03 trillion at the end of August, according to the Treasury Department.

The yuan has depreciated more than 9% since its January peak as the country experiences sluggish economic growth at home and escalating trade frictions with the U.S.

A previous version of this story incorrectly stated that China is the largest foreign holder of U.S. debt, while it is actually the largest foreign holder of U.S. treasuries held by foreigners.

Contact reporter Charlotte Yang (yutingyang@caixin.com)