China’s holdings of U.S. Treasuries declined by the most on record last year, as the world’s second-largest economy dipped into its foreign-exchange reserves to buttress the yuan. Japan, America’s largest foreign creditor, trimmed its holdings for a second straight year. A monthly Treasury Department report released in Washington on Wednesday showed China held $1.06 trillion in U.S. government bonds, notes and bills in December,

up $9.1 billion from November but down $188 billion from a year earlier. It was the first monthly increase since May. The People’s Bank of China, owner of the world’s biggest foreign-exchange reserves, has burned through a quarter of its war chest since 2014 in an effort to underpin the yuan and deter capital from fleeing the country. READ MORE