Foreign buying of US Treasuries rebounds Foreign demand for US bonds and stocks rebounded sharply in November, with private investors prominent buyers of US Treasuries, according to the latest official data released on Wednesday. Private investors bought a net $29.7bn of Treasury notes and bonds in November, up sharply from net purchases of $3.4bn in October based on the monthly Treasury International Capital report, known as TIC. The buying came as investors anticipated that the Federal Reserve would continue making large monthly purchases of Treasuries under its quantitative easing policy, a move that was subsequently confirmed by the central bank in December. Renewed flows into Treasury debt during November also reflected investors adjusting to the Fed having announced big purchases of mortgage securities in September under QE3. "Foreign buying of US securities rebounded notably in November, with post-QE3 normalisation bringing an improved pace of Treasury purchases as buying of Agency securities slows," said TD Securities. Private accounts sharply stepped up the pace of their Treasury purchases during the month. Overall net foreign purchases of US Treasury notes and bonds by official and private accounts was $26.4bn in November, more than double the $12bn pace for October and the strongest in three months. Private investors located in the UK and Caribbean banking centres - favoured by hedge funds - led the way with purchases of $11.8bn to $145bn and $10.2bn to $284bn respectively. Treasury buying in the UK is often revised, as London is a major financial centre for purchases by Asian central banks. Canada and France were also notable buyers of US Treasuries during November, while China and Japan further cemented their status as the two biggest holders of US government debt. China's holdings rose modestly to $1.17tn, its highest tally in a year that has seen its portfolio shrink from $1.25tn. Japan's holdings rose a touch to $1.13tn and are up from $1.06tn over the past year, narrowing the gap to China as the largest owner of US Treasury debt. Analysts expect Japan will remain a solid buyer of Treasuries into 2013 as the country is setting up a fund to purchase foreign assets in order to help weaken its currency, thereby boosting the economy. "We expect Japanese purchases of foreign debt based on their desire to weaken the currency will include sovereign bonds such as US Treasuries," said John Briggs, strategist at RBS Securities. Recent Fed data for the month of December showed that foreign central banks boosted their Treasury holdings by $40bn. The TIC data showed that net long-term securities buying of bonds and stocks was $52.3bn, after a decline of $1bn in October. Foreign investors bought $10.9bn of US corporate debt, the highest monthly purchase amount since March 2010 according to TD.