Foreign Holdings of U.S. Treasuries Reach Record $9.13 Trillion

Foreign demand for U.S. government debt set a fresh record in June, with overseas holdings of Treasuries rising to $9.13 trillion, according to Treasury International Capital data released on Friday. Net long-term securities inflows reached $150.8 billion, easing from May’s $259.4 billion but still pointing to robust appetite for dollar assets. Total net capital inflows, which include short-term instruments and banking flows, slowed to $77.8 billion. Official institutions accounted for $70.5 billion of the month’s inflow, reversing the outflow logged in May. Japan retained its position as the largest foreign holder of Treasuries, increasing its stake to $1.148 trillion. The United Kingdom boosted its holdings to $858 billion, while China’s position was unchanged at $756 billion. The figures underscore continued overseas interest in U.S. debt even as a weaker dollar and shifting rate expectations have raised questions about the sustainability of foreign demand. Separate data from Japan’s Ministry of Finance for the week ended 8 August showed a sharp turnaround in cross-border flows. Foreign investors bought a net ¥733.2 billion of Japanese bonds and ¥489.3 billion of equities, while Japanese investors became net buyers of overseas bonds for the first time in three weeks, purchasing ¥254.9 billion. Japanese investors continued to pare overseas equity exposure, logging net sales of ¥225.5 billion. The figures suggest investors are repositioning amid widening yield differentials and persistent currency volatility.