Foreigners were once again major investors in the U.S. stock market during January, helping to drive a large $62.1 billion of net long-term investment inflow in the month. Foreign accounts, almost entirely private ones, invested a net $34.5 billion into equities for what is the fifth straight positive month and one of the largest on record.
Foreign accounts were, in contrast, small net sellers of corporate bonds but were major buyers of government agency bonds and also Treasury bonds. Country data show a sizable $16.7 billion decline in Chinese holdings of Treasuries, to $1.168 trillion in January, with Japan in second place just more than $100 billion behind with a $4.3 billion rise to $1.066 trillion.
U.S. accounts were small net buyers of foreign securities, at $1.1 billion in the month, which for the report's headline is subtracted from total foreign buying of U.S. securities of $63.2 billion. Large financial inflows help offset the nation's growing trade and government deficits.