(Nov 19): Overseas holdings of US Treasuries retreated somewhat in September after notching a fresh record high in August, with the UK paring back its stockpile and Japan’s climbing to its highest in more than three years.
Foreign investors held a total of US$9.25 trillion ($12.05 trillion) of Treasuries in September, compared with US$9.26 trillion the previous month. Holdings are affected by net sales or purchases, along with shifts in valuation. The Bloomberg US Treasury index advanced in both August and September.
The Treasury on Tuesday published data for both August and September, as the department catches up with a release calendar that was disrupted by the federal government shutdown.
Treasury holdings figures have been under extra scrutiny this year amid concerns that some of President Donald Trump’s trade and foreign policy moves might have reduced international confidence in US assets. Some analysts have pointed to the surging price of gold as a sign of global efforts to diversify away from the dollar.
Treasury Secretary Scott Bessent has regularly dismissed such “sell America” angst, saying “we’ve seen very, very good foreign interest lately” in US Treasuries, in a Fox Business interview on Oct 23. “Our Treasury bill auctions have never been so solid, especially with overseas buyers.”
Japan, the biggest foreign holder of Treasuries, saw an US$8.9 billion rise in its holdings, to US$1.19 trillion — the highest level since August 2022.
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“The thing that stands out to me most of all is Japan,” said Lee Ferridge, a strategist at State Street. “This buying of Treasuries might be a factor behind continued yen weakness, and may be a sign that Japanese investors are wary of Japanese government bonds even as domestic yields rise.”
The yen has retreated in recent months against the greenback, trading at the weakest since February on Tuesday. It was also the worst-performing currency this year among peers in the Group of 10.
UK holdings of Treasuries, the second largest, decreased by US$39.3 billion to US$865 billion.
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China’s holdings
China’s stockpile of Treasuries, the third largest, dipped by US$500 million in September from the previous month, to US$700.5 billion. Belgium, whose holdings include Chinese custodial accounts according to market analysts, saw its stockpile go up by US$12.5 billion, to US$466.8 billion.
“I continue to see no signs of foreign investors moving away from US assets,” said Alex Cohen, a strategist at Bank of America. “It is still an attractive destination.”
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