Global investors boost US debt holdings as Canada and Belgium increase purchases

Foreign holdings of US Treasuries rose in August from an almost one-year low, reaching a total of $9.33 trillion. Data released by the Treasury Department on Friday shows that overseas holdings climbed more than $83 billion from July. These figures include changes in valuation along with net sales and purchases. The Bloomberg US Treasury index moved up 0.3% in August before dropping in September due to worries about persistent inflation and potential Federal Reserve interest-rate hikes.

Shifts by Country

Japan remains the largest foreign holder of Treasuries, but its holdings dropped by $36 billion to $1.1 trillion in August, marking the lowest level since December 2024. Japanese authorities intervened in the foreign-exchange market over the summer by buying yen after the currency fell to a four-decade low against the dollar. Japan likely sold some of its US securities during this intervention. Mainland China, the third-largest holder, saw its holdings drop by $27 billion in August to $591 billion, which is an 18-year low. Analysts suggest Beijing may have routed some transactions through other countries like Canada. Meanwhile, Canada increased its holdings by $38 billion to nearly $465 billion, and Belgium added nearly $20 billion to reach about $491 billion. The UK, the second-biggest holder, increased its holdings by $11 billion in August, pushing past $1 trillion for the first time.

Context

US Treasuries are government debt securities issued by the United States Department of the Treasury to help pay for government spending. Foreign governments and central banks frequently buy these debt instruments to hold safe assets and manage their foreign exchange reserves. Shifts in these holdings reflect broader global economic trends, currency interventions, and how different nations manage their financial portfolios.