Demand for US Treasuries continues to be strong despite high levels of issuance. According to the Treasury Department, foreign holdings of Treasuries saw their fifth monthly increase, reaching new highs.

As of the end of February, foreigners held $7.97 trillion of US Treasuries, nearly 9% higher than February 2023. Japan is the largest holder of Treasuries, outside of the US, at $1.17 trillion, which is the most since August 2022. 

However, some believe that the country may be looking to boost the value of its currency, as it hit a 34-year low against the dollar earlier this week. In 2022, Japan intervened in currency markets by selling dollars and buying the yen when it was at similar levels. As a result, its holdings declined by $131.6 billion due to these transactions. 

Another trend is that China’s holding of Treasuries continues to decline. The country held $775 billion in Treasuries, a decline of $22.7 billion from the previous month. This is the lowest amount since March 2009. 

Europe saw the biggest monthly increase of $27 billion and owns $320 billion in total. Great Britain also saw a $9 billion increase in Treasury holdings to reach $701 billion. 

Finsum: Despite recent volatility in US Treasuries, foreign holdings continue to rise. Japan remains the largest owner of Treasuries, while China continues to reduce its stake.