Top foreign creditors show concern on US default

China and Japan, which together hold more than $2.4 trillion in US Treasury securities, raised pressure on the US to resolve a political impasse on its debt ceiling that threatens to destabilize global financial markets. Japan must consider the impact of any default on its bond holdings, even as the US will probably avoid a fiscal crisis, Japanese Finance Minister Taro Aso said on Tuesday at a news conference in Tokyo. Chinese Deputy Finance Minister Zhu Guangyao said on Monday that the US should prevent a default, the People's Daily reported. Any failure by the US to honor its debt obligations would damage the dollar's status as the world's reserve currency, with implications for investors globally. A shift in asset allocation by China, Japan or other major holders of US government securities could push up US interest rates and cause swings in global currency markets.

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