Foreign holdings of US Treasuries hit record high; Japan holdings rise, data shows

NEW YORK, April 17 – Foreign holdings of US Treasuries surged to a record in February, its fifth straight monthly rise, Treasury Department data released on Wednesday showed.

Holdings totaled USD 7.965 trillion, up from a revised USD 7.945 trillion in January. Treasuries owned by foreigners rose 8.7% from a year earlier.

Holdings of Treasuries grew the most in Belgium, by USD 27 billion, to hit USD 320 billion. Japan, the largest non-US holder of Treasuries, increased its US government debt to USD 1.167 trillion, the largest since August 2022 when the country’s holdings were at USD 1.196 trillion.

Investors have been alert to the threat of Japanese intervention in the currency market to boost the yen, which plunged to a 34-year low of 154.79 per dollar on Tuesday.

The Bank of Japan intervened three times in 2022, selling the dollar to buy yen, first in September and again in October as the yen slid toward a 32-year low of 152 to the dollar.

In September and October 2022, Japan’s Treasury holdings declined USD 131.6 billion from USD 1.196 trillion in August.

China’s pile of Treasuries also fell in February to USD 775 billion, data showed. The monthly decline of USD 22.7 billion was the second biggest among the 20 major countries on the Treasury’s list.

Holdings of Treasuries by China, the world’s second-largest economy, have been declining, reaching USD 763.5 billion in February, the lowest since March 2009.

Britain listed its Treasury holdings at USD 700.8 billion, up about USD 9 billion from January.

The benchmark 10-year Treasury yield started February at 3.863% US10YT=RR and ended the month at 4.252%, up nearly 39 basis points. Yields rose as a slew of solid economic data was released that month, reflecting expectations that the Federal Reserve will delay cutting interest rates.

Major US asset classes had inflows during the month, the data showed.

On a transaction basis, US Treasuries posted inflows of USD 88.8 billion, up from USD 46.3 billion in January.

Foreign buying of US corporates and agencies persisted in February, with inflows of USD 52.7 billion and USD 3.7 billion, respectively.

US equities showed a minor inflow of USD 400 million, compared with outflows of USD 15.4 billion in January.

Overall, net foreign acquisitions of long- and short-term securities, as well as banking flows, showed a net inflow of USD 51.6 billion in February, up from outflows of USD 30.8 billion the previous month, Treasury data showed.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Richard Chang)