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New York — Foreign holdings of US treasuries rose to record levels in June, topping $9-trillion for a fourth straight month, data from the treasury department showed on Friday.
Holdings of US treasuries climbed to $9.13-trillion in June, up from $9.05-trillion in May. Compared with a year earlier, Treasuries owned by foreigners were up nearly $1-trillion, or 10% higher.
However, on a transaction basis, the US experienced outflows of $5bn after buying roughly $147bn in Treasuries in May, the largest since August 2022. In April, there was an outflow of $40.8bn as President Donald Trump’s back-and-forth tariff policies roiled markets.
Japan remained the largest non-US holder of treasuries, with a record $1.147-trillion in June, up $12.6bn from the previous month’s $1.134-trillion.
UK investors, the second-largest owner of US government debt, raised their pool of treasuries to another record of $858.1bn, up 0.6% from $809.4bn in May.
The UK overtook China as the second-largest non-US holder of treasuries in March. The UK is widely viewed as a custody country, generally a proxy for hedge fund investments. Other countries used by hedge funds for custody services include the Cayman Islands and the Bahamas.
Treasury holdings of China, the third-largest owner of US government debt, were little changed at $756.4bn, compared with $756.3bn in May, which was the lowest since February 2009 when the country’s stock of treasuries dropped to $744.2bn.
China holdings
China’s holdings were way below their largest level of more than $1.3-trillion held in 2012-16. China, the world’s second-largest economy, has been gradually dumping treasuries to bolster its currency, the yuan. Analysts said a slowing Chinese economy, post-Covid challenges and trade barriers have diminished China’s inflows from exports.
Data also showed that other foreign investors in Asia such as Hong Kong and India reduced their cache of treasuries to $242.6bn and $227.4bn, respectively.
Foreign investors, meanwhile, also poured back into US equities, injecting inflows of $163.1bn in June that followed $115.8bn in purchases in May.
Data also showed that the net capital inflow into the US totalled just $77.8bn, down 75% from the revised $318.1bn in May, which was the largest since September 2024. Reuters
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