June 15, 2020 / 8:59 PM / 22 days ago

UPDATE 1-U.S. Treasuries saw second month of heavy foreign selling in April

(Adds data, analyst comment, bylines)

By Ross Kerber and Karen Pierog

June 15 (Reuters) - Foreign investors continued selling U.S. Treasury bonds and notes in April, Treasury department data as of Monday showed, but at a slower rate than in the record-setting pace of March.

On a transaction basis, foreigners sold $176.703 billion in Treasuries in April, down from $298.910 billion in March, the U.S. Treasury Department said.

The yield on the benchmark 10-year U.S. Treasury note hit a low of 0.543% on April 21 and ended the month at 0.625% as investors sought safe havens during the COVID-19 pandemic.

The selling suggested foreign holders were rushing to raise cash in March, and slowed down in April as government steps to counter the pandemic took hold, said Gennadiy Goldberg, interest rate strategist for TD Securities.

“When markets are going berserk, you typically sell the most liquid thing,” he said.

In all foreigners held $6.765 trillion of Treasuries at the end of April, down from $6.81 trillion at the end of March.

Japan reduced its Treasury holdings from March’s all-time high by $5.7 billion to $1.266 trillion in April, still the largest amount held by any foreign investor in U.S. Treasuries.

China, the second-largest holder of U.S. Treasuries, also reduced its total to $1.073 trillion in April, down by $8.8 billion from the previous month.

With the oil market in a freefall due to a plunge in demand, Saudi Arabia’s Treasury holdings fell to $125.3 billion in April from $159.1 billion in March.

As they sold Treasuries, foreign investors also bought $10.94 billion of U.S. corporate bonds in April, up from $3.21 billion in March.

As for U.S. stocks, foreign investors sold $5.61 billion in April, after purchasing $7.09 billion in March. (Reporting by Ross Kerber in Boston and by Karen Pierog in Chicago; Editing by Chris Reese and Richard Chang)

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