"All of last year there was this fantastic correlation between US 10-year yields and dollar-yen and people put on what is known as pairs trades", said Greg Anderson, global head of FX strategy at BMO Capital Markets in NY.
"We think this story could be quoting a mistaken source or it could also be a piece of fake news", the State Administration of Foreign Exchange said in a statement on its website. "It's challenging to find any real substantial alternatives", with China earning dollars - the flip side of the USA current account deficit.
"It's certainly more of a hawkish tilt in the minutes", said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.
The PBOC is the second largest holder of US Treasuries in the world, after the Federal Reserve, and is estimated to have some $1.2 trillion of the bonds inside of its foreign exchange reserves. The increase came as the size of the USA debt market more than tripled to $14.5 trillion.More news: (NYSE:UPS) Stake Boosted by Parnassus Investments CA
Market sentiment seems tilted toward the dollar's downside, said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.
U.S. Treasuries pared some of their losses, pushing down the 10-year yield to 2.544 percent from Wednesday's 10-month high of 2.597 percent, hit after a Bloomberg report that China is considering slowing or halting purchases of U.S. Treasury bonds.
Australian shares fell to their weakest level in over a week on Thursday, led by declines in the financial sector after Wall Street was pressured by a report that China may slow its buying of USA governments debt.
Crude oil prices jumped on Wednesday and settled near three-year highs after USA government data showed a drop in crude inventories and production, though the fall in the latter could be the result of extreme cold temperatures across the United States.
Beijing keeps a big share of its $3.1 trillion in foreign currency reserves in Treasury debt, which is considered safe and easy to trade.More news: Man United boss Jose Mourinho gives big Zlatan Ibrahimovic update
"We don't see a material impact on the United States dollars, and our view is for further USD depreciation as the global economy picks up and "other" central banks look toward tightening their monetary policies", Grace and Haddad say.
A treasury bond is a marketable, fixed-interest USA government debt security with a maturity of more than 10 years.
In the eyes of some, Chinese officials may be trying to send a message that they have leverage with President Trump talking tough on trade.
Brent has gained 5 percent since the beginning of the year, picking up from its late-year surge.
For China and its Treasuries holdings, "things are more or less as they always have been", said Seth Carpenter, chief US economist at UBS Securities LLC in NY and a former Fed and Treasury official.More news: Sam Allardyce Left Stunned As Players "Throw In The Towel" Against Spurs