China is diversifying its foreign reserves. Its bullish turn to European and Japanese bonds, at the expense of the U.S. is obvious.
China trimmed its holdings of U.S. treasury debt by 24 billion dollars in June, although it still accounts for most of China's foreign reserve portfolio. It's the second consecutive month of decline.
In the meantime, China boosted its holdings of Japanese government bonds in June, by more than 5 billion U.S. dollars. This is the sixth consecutive month of increase. The holdings of South Korean won has also been increased.
Experts say the aim of managing reserve money is to maintain its value. And diversification is the first principle in managing any investment asset.