'Asian central banks will stick with US'

Asian investors are likely to retain their US Treasuries holdings for now after the American sovereign credit rating was lowered, with options limited by the region’s foreign-exchange rate policies.

“They won't be happy about it but Asian central banks will just have to hold on and stick it out,” said Sean Callow, a senior currency strategist at Westpac Banking Corp in Sydney.

“There is pressure on them to hold on to liquid assets and there is nothing more liquid than the Treasury market . At least Treasuries have been doing well and they aren't holding on to distressed assets.”