Foreign holdings of US Treasuries rebounded in August, with UK holdings surpassing $1 trillion for the first time

Zhihui Finance APP noted that data released by the U.S. Treasury Department on Friday shows that the scale of U.S. Treasury bonds held by foreign investors rebounded in August, with Canada and Belgium leading the increase, and foreign holdings recovering from their lowest level since October 2025.

According to Treasury data, foreign holdings increased by more than $83 billion compared to July, bringing the total scale to $9.33 trillion.

Foreign holding data includes valuation changes and net purchases and sales. The Bloomberg U.S. Treasury Index rose 0.3% in August, followed by a decline in September due to ongoing concerns about inflation and a new round of Federal Reserve interest rate hikes.

Japan, as the largest foreign holder of U.S. Treasuries, reduced its holdings by $36 billion in August, down to $1.1 trillion, the lowest since December 2024. Japanese officials had been intervening in the foreign exchange market this summer, buying yen as the yen fell to its weakest level against the dollar in forty years. Data from last month suggests that Tokyo may have sold some U.S. Treasuries and other securities holdings.

Friday’s report shows that Mainland China, as the third-largest holder of U.S. Treasuries, reduced its holdings by $27 billion in August, bringing the total to $591 billion, a new 18-year low. Some analysts said that the Chinese government might have conducted some U.S. securities transactions through channels in other countries, including Canada.

Canada increased its holdings by $38 billion to nearly $465 billion; Belgium increased its holdings by nearly $20 billion to about $491 billion.

The UK, as the second-largest holder of U.S. Treasuries, increased its holdings by $11 billion in August, surpassing the $1 trillion mark for the first time.