WASHINGTON — The two biggest foreign buyers of U.S. Treasury securities kept investing during a tense fight in Washington over raising the government’s borrowing limit. But overall foreign holdings fell for only the second time in more than two years, a sign that some investors worried about a possible default.
The Treasury Department’s monthly report issued Friday showed that China, the biggest buyer of U.S. Treasury debt, increased its investments for a fourth-straight month. Japan, the second-largest buyer, also invested more after cutting holdings the previous month.
But total holdings dipped 0.4 percent to $4.48 trillion in July, the second decline since April 2009. Russia, India and the Caribbean banking centers, which includes the Bahamas and Bermuda, all trimmed their holdings.
Congress and the Obama administration reached an 11th-hour deal on Aug. 2 to increase the nation’s borrowing limit by more than $2 trillion.
Analysts said the near-default rattled some investors, especially those overseas.
The biggest investors kept buying. China’s holdings rose 0.7 percent to $1.17 trillion. Japan’s holdings increased 0.4 percent to $914.8 billion. The United Kingdom, the third-largest buyer, boosting its holdings 1.4 percent to $352.5 billion.
Net purchases of long-term securities, a category that includes not only U.S. government debt but also bonds sold by U.S. corporations, increased $9.5 billion in July.
