This figure, released on 18/9, represents a nearly $32 billion increase from the previous month and a 9% rise compared to the same period last year. This is the third consecutive month that foreign holdings of US Treasury bonds have reached a record high, primarily due to purchases from the UK and Japan.
Japan remains the largest foreign holder of US debt, with $1.151 trillion in bonds. This is also the highest level since 3/2024.
Low inflation, slow domestic economic growth, and years of negative interest rates have driven Japanese investors to seek higher returns abroad, with the US being a primary destination.
Following Japan, the UK holds nearly $900 billion in US government bonds. This represents a 5% increase from June and is also a new record high. London, a hub for international capital, is often chosen by investment funds to manage client assets.
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US dollar bills in a money exchange in Lebanon. Photo: Reuters |
US dollar bills in a money exchange in Lebanon. Photo: Reuters
In contrast, China's holdings of US government bonds decreased by over $25 billion to $730.7 billion. This is the lowest level since 12/2008. Between 2012 and 2016, China consistently held over $1.3 trillion in US Treasury bonds.
However, over the past decade, China has gradually reduced its holdings of US government bonds due to both market and strategic factors. Strategically, China seeks to reduce its reliance on the US dollar for reserves, trade settlements, and investments.
Additionally, China has sold some of its US Treasury holdings to support its own currency, the renminbi. Analysts suggest that slower economic growth, post-pandemic challenges, and trade barriers have reduced China's export revenues.
In recent months, foreign holdings of US government bonds have drawn attention amid concerns about demand following former President Donald Trump's increased import tariffs on most trading partners. Foreign funds and governments currently hold over 30% of outstanding US government bonds.
Ha Thu (according to Reuters, Bloomberg)
