Slower foreign buying contributed to rise in Treasury yields

US Treasury yields have risen over the past few months and foreign investors appear to have contributed to the trend. From Bloomberg:

Foreign investors, the bulwark of the U.S. government bond market as it more than doubled in size during the financial crisis, are adding Treasuries at the slowest pace since 2006 amid the worst rout in four years.

Holdings by non-U.S. investors rose 1.9 percent through May, down from 5.2 percent a year ago data last week show, as foreigners owned less than 50 percent of Treasuries outstanding for the first time since March 2012. Overseas central banks cut the amount of bonds held for them by the Federal Reserve during the second quarter. The Bloomberg U.S. Treasury Bond Index fell 2.4 percent, the most since 2009, after Chairman Ben S. Bernanke said he might slow asset purchases as the economy improves...

Central bank sales probably were “far more significant in June,” and helped push two-year note yields to as high as 0.43 percent in June 25 from as low as 0.19 percent in May, Sebastien Galy, a senior foreign-exchange strategist in New York at Societe Generale SA, France’s largest bank, said in a telephone interview on July 16.

The 10-year Treasury yield hit 2.75 percent on 8 July, the highest since August 2011.

Since then, however, Treasuries have recovered some of their losses. The 10-year yield fell 10 basis points last week, touching a low of 2.46 percent on 17 July after Federal Reserve Chairman Ben Bernanke told Congress that the Fed will not slow its bond purchases if the economy does not perform as well as it expects.