If they diversify from the U.S. dollar denominated assets, it would lower the value of the U.S. dollar relative to China's currency, the yuan, and make it more expensive for American companies to buy goods made in China.

Most of (the holdings) are in dollar-denominated assets. They'll want to see how vulnerable it is to the U.S. Congress. It'll be more difficult to finalize an investment proposal that involves an American bank or an American asset.

There is enormous demand for dollar denominated assets so I don't expect that this demand would drop precipitously.

Japanese institutional investors seem to have sought returns by selling dollar-denominated assets. That kind of repatriation is generally yen positive.

I think it's a good idea to diversify the economy and keep more of the grapes here.

Diversify your investments