The U.S. Treasury released its Treasury International Capital Data on Wednesday, revealing that foreign demand for U.S. stock and bonds was on the rise in November.
Private investors, who were the predominant buyers of U.S. treasuries, purchased a net $29.7 billion of treasuries in November, a sharp increase from $3.4 billion in October, Financial Times reports.
The buying increase can be attributed to investor expectations that the Federal Reserve would continue its bond-buying program under its quantitative easing policy, which was confirmed last month by the central bank.
“Foreign buying of U.S. securities rebounded notably in November, with post-QE3 normalization bringing an improved pace of Treasury purchases as buying of Agency securities slows,” TD Securities said, according to Financial Times.
Net foreign purchases of U.S. Treasury notes and bonds by official and private accounts totaled $26.4 billion in November, more than double the $12 billion reported in October and the strongest numbers posted in three months.
Private investors in the U.K. and the Caribbean purchased the most, with $11.8 billion and $145 billion in purchases and $10.2 billion and $284 billion, respectively. Canadian and French investors also purchased a large amount of U.S. treasuries in November, while Chinese and Japanese investors increased their holdings only slightly in November, Financial Times reports.
Japan’s holdings increased to $1.13 trillion, up from $1.06 trillion over the past year, and analysts expect Japan to continue its treasury purchasing in 2013. The Japanese government plans to establish a fund to purchase foreign assets in order to reduce the value of its currency and boost its economy.
The data also revealed that net long-term securities buying of bonds and stocks totaled $52.3 billion after a $1 billion decrease in October. Foreign investors purchased $10.9 billion of American corporate debt, the highest monthly purchase amount since March 2010, according to Financial Times.