Foreign Buying of U.S. Securities Rises for 1st Time Since January

Foreign investors purchased a net $71.8 billion of U.S. Treasuries, stocks, corporate bonds and other securities in June, the first increase since January, the Treasury Department said Monday.

Net purchases rose from a revised $65.2 billion in May as demand for Treasuries and U.S. stocks increased, the government said in a monthly report.

Economists monitor the figures as a gauge of international investors’ willingness to continue funding the nation’s huge trade gap. The United States needs $1.6 billion a day in foreign capital to help plug its current account deficit, the broadest measure of trade.

Foreign investors boosted their U.S. stock holdings in June as the market rebounded from its spring lows. Also, investors abroad were attracted by Treasury note and bond yields that hit two-year highs in mid-June in anticipation the Federal Reserve would raise short-term rates for the first time since 2000.

“The figures are overwhelmingly surprising,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York. “U.S. assets remain attractive to foreigners.”

Overall, foreign investors bought a net $40.5 billion of Treasuries in June, up from $29.3 billion in May.