Japan surpasses China as largest foreign holder of U.S. debt

Is China slashing its holdings of Treasurys or is Japan buying more United States debt? Well, it’s a bit of both.

According to the Treasury Department, Japan’s holdings of U.S. bonds, bills, and notes surged by just under $8 billion to $1.13 trillion in July. This is the largest amount in three years, and Tokyo is now the largest non-U.S. holder of Treasurys for the first time since May 2017.

China, meanwhile, cut its holdings by $2.2 billion to $1.11 trillion. Beijing is now the second-largest holder of American debt.

Rounding out the top five were the United Kingdom ($334.7 billion), Brazil ($309.9 billion), and Ireland ($258.2 billion).

What is remarkable is that many countries reduced their holdings from June to July.

In total, foreign holdings of Treasury securities is down from $6.636 trillion in June to $6.63 trillion in July.

Here is the full list.