(Bloomberg) -- Global investors sold China’s onshore bonds for the eighth straight month, the longest streak on record, as the notes’ appeal was dampened by a surge in Treasury yields and a weaker yuan.

Foreign investor holdings of Chinese bonds in the interbank market fell by about 70.7 billion yuan ($9.7 billion) in September following net sales of 35.4 billion yuan in the previous month, according to data from China Central & Depository Clearing Co. and Shanghai Clearing House.

China’s bond outflows intensified last month as the yuan fell to the weakest level since 2008, reducing the appeal of the nation’s assets for global investors. Surging treasury yields due to a hawkish Federal Reserve bets also dented the attractiveness of yuan-denominated debt as the People’s Bank of China maintained an accommodative stance to boost the economy.

Continued outflows amid the Fed’s aggressive tightening in September were expected, said Qi Gao, strategist at Scotiabank, adding that the market may need to be patient before global buyers return.

In September, foreign investors sold a net 35.8 billion yuan of Chinese government bonds and 20.8 billion yuan of the quasi-sovereign policy bank notes. They also sold 410 million yuan of local government bonds and 3.1 billion yuan of negotiable certificate of deposits, a popular short-term debt issued by banks.

Government bonds ended a streak of steady inflows that started in July that were partly driven by passive fund flows following the inclusion of Chinese bonds into the FTSE Russell’s World Government Bond Index. 

Global investor holdings of Chinese bonds in the interbank market stood at 3.4 trillion yuan as of last month. Foreign ownership of government notes declined to 9.4% of the total outstanding volume at the end of September from 9.8% a month before.

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