Japan, UK, China pull back from U.S. debt

Major foreign holders of U.S. Treasury debt reduced their holdings in June. Japan, the largest foreign holder, cut its position by 2.3 percent, from $1.14 trillion to $1.12 trillion, while the United Kingdom reduced its holdings by 1 percent, from $948.6 billion to $939.9 billion. China reduced its holdings from $659.3 billion to $633.4 billion, the lowest level since 2008. China has cut its U.S. debt holdings by more than 13 percent over the past year. If foreign investors continue to lose their appetite for U.S. treasuries, the already heavily indebted federal government will face higher borrowing costs and, more significantly, more nations will stop using the dollar as a reserve currency, causing its value to plummet.