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US Sees Alarming Surge in Foreign Holdings of Treasuries: $9.3 Trillion Record High in January 2023

US Sees Alarming Surge in Foreign Holdings of Treasuries: $9.3 Trillion Record High in January 2023

2026-03-26

US Sees Alarming Surge in Foreign Holdings of Treasuries: $9.3 Trillion Record High in January 2023

Foreign investors are buying more US Treasuries, with a rise of $34.8 billion in January alone, reaching a record-high $9.3 trillion. On top of that, it is the second-highest level in history, fueled by the appetite of major holders such as Japan, the UK, and China.

Japan Takes the Lead

Japan, the biggest foreign holder of US Treasuries, boosted its holdings by $39.8 billion to $1.2 trillion, a level not seen since July 2022. This is the twelfth consecutive monthly increase, primarily due to domestic investors chasing higher yields abroad. Also, the Bank of Japan’s gradual easing of policy has helped to promote this trend.

US Treasuries
Source: Financial Times

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UK and China Continue to Increase Their Holdings

The UK, currently the second-largest holder, boosted its holdings by $29.3 billion to $895.3 billion, marking the third-highest level ever. China, the third largest holder, added $10.9 billion to its reserves, amounting to $694.4 billion, the highest since September. European Union holdings also went up by $8 billion to $2.1 trillion.

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EU Boosts Treasury Holdings

The European Union’s jump in holdings is a sign of increased interest in US Treasuries by European investors. Probably, this is one of the attractive yields on these instruments and a wish for diversification in the face of economic uncertainty worldwide. Finally, foreign investors take great interest in US Treasuries due to their high yields and long-term status as safe-haven assets. While the global economy continues to be uncertain, this trend should continue.

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Global Demand

Foreign investors have increased their holdings of the treasuries to a new high of $9.3 trillion, primarily motivated by the allure of better yields and a preference for secure assets. Key holders such as Japan, the UK, and China are still buying more, with Japan being the biggest buyer as it added $39.8 billion to reach $1.2 trillion. This pattern points to worldwide economic concerns and a substantial appetite for government bonds.

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