(Bloomberg) — Two of the world’s biggest foreign holders of US government debt offloaded a pile of Treasuries in the third quarter as they rallied before the presidential election.

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Japanese investors sold a record $61.9 billion of the securities in the three months ended Sept. 30, data from the US Department of the Treasury showed on Monday. Funds in China offloaded $51.3 billion during the same period, the second biggest sum on record.

The return on Treasuries peaked at a 2-1/2 year high in mid-September before the Republican Party gained control of both houses of Congress and the White House. The securities have since dropped almost 4% from that level on concern President-elect Donald Trump’s low-tax, high tariff policies will fuel inflation.

“It’s a cocktail of banks and pension selling ahead of the US elections in Japan — the risk of a Trump win and expectations of higher US yields bruised sentiment for the bonds,” said Shoki Omori, chief Japan desk strategist at Mizuho Securities Co. in Tokyo. “Even more so in China where geopolitical risk was a real concern, and that’s spurred investors to ditch Treasuries too.”

Japan’s selling may have been in part amplified by the nation’s intervention in the foreign-exchange market on July 11 and 12 when the Ministry of Finance sold dollars to buy the yen for a total of ¥5.53 trillion yen ($35.9 billion).

The sales by China may have also been skewed due to its use of custodial accounts. Funds in Belgium, seen as a home to such accounts for China, bought a record $20.2 billion of Treasuries in September.

Uncertainty over Trump’s pick for US Treasury secretary is also adding to the upward pressure on US yields along with paring of Federal Reserve interest-rate cut bets in the face of a resilient economy.

“We’re confirming everything we’ve started to price in — that Trump’s likely going to have inflationary policies, tariffs, and that’s going to only lead to more Treasury sales from China and Japan,” said Nick Twidale, chief analyst at AT Global Markets in Sydney. “They’ve been good defensive measures by China and Japan and that’s probably going to continue.”

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