[cityhantam]

The latest data from BMO Capital Markets show the largest overseas holder of Treasuries has offloaded almost US$60 billion over the past three months. While that may be small change relative to the Japan’s US$1.3 trillion stockpile, the divestment threatens to grow.

That’s because the monetary path between the US and the Asian nation is diverging ever more, the yen is plumbing to 20-year lows and market volatility stateside is breaking out. All that is ramping up currency-hedging costs and completely offsetting the appeal of higher nominal US yields, especially among large life insurers.