WASHINGTON _ Japan surpassed China in June as the top holder of U.S. Treasuries as the trade war between the world's two largest economies intensified.
Japan increased its holdings of U.S. bonds, bills and notes by $21.9 billion to $1.12 trillion, the highest level in more than 2 { years, according to data released by the Treasury Department on Thursday. Meanwhile, China's ownership rose for the first time in four months to $1.11 trillion, up by $2.3 billion.
The last time Japan held the position as America's largest foreign creditor was May 2017.
A cautious months-long calm in the U.S.-China trade war was interrupted in May when talks between the two sides broke down. In June the U.S. raised tariffs on $200 billion of Chinese goods to 25% from 10%.
While Trump and Chinese leader Xi Jinping agreed to a ceasefire in late June, that only lasted about a month before the U.S. president announced that on Sept. 1 he'll impose a 10% levy on virtually every import from China not yet subject to duties.
This week, Trump partially backed down by delaying the 10% charge on certain items, including mobile phones and laptops, until Dec. 15 to stem the impact on holiday shopping. Beijing says it still plans to retaliate.
China's U.S. debt hoard has come under increased scrutiny in the trade dispute amid speculation that the Asian nation could sell Treasuries in response. Earlier this month, the U.S. formally labeled China a currency manipulator after the yuan weakened past 7 per dollar.
