China's US Treasury holdings increase

China increased its holdings of US Treasuries in March, the first time in eight months, to snap up safe-haven government debt in the wake of banking stress during the month.

But the trend may not sustain as the latest data indicated that the US economy is heading south.

Holdings of China, the second-biggest non-US holder of Treasuries, stood at US$869.3 billion (HK$6.78 trillion) at the end of March, up by US$20.5 billion from February, according to the US Treasury Department. Its February holdings were the lowest since May 2010. China had been selling Treasuries for most of last year.

Japan remains the largest non-US holder of Treasuries with US$1.087 trillion, up from US$1.082 trillion in February. Japan also had been selling Treasuries for most of 2022 to help boost a weak yen.

In other news, the New York Empire State business-conditions index, which measures manufacturing activity in the state, fell 42.6 points to negative 31.8 in May.

And at least seven large companies filed for Chapter 11 bankruptcy protection in less than 48 hours. It is the largest number of filings on record during a two-day period since at least 2008, according to Bloomberg-compiled data on companies with at least US$50 million in liabilities.