According to the U.S. Department of the Treasury, China replaces Japan to become the largest oversea holder of U.S. government bond, at the same time there is the reduction of bonds held by Japan. Until the end of June, China holds 1.147 trillion dollars of U.S. Bond, while Japan reduces its holding from 1.111 trillion to 1.091 trillion. According to the Daiwa Capital Markets Hong Kong Limited's economist David Lai, China is using the weak USD to increase its holding of American government bonds.