US Treasury Holdings Slide $50B as China, Japan Cut Exposure

Key Insights:

• US Treasury holdings fell by $50.4 billion in July.
• China cut holdings to their lowest level since August 2008.
• Japan reduced exposure while broader foreign capital flows stayed positive.

US Treasury data released Sept. 16 showed foreign Treasury holdings fell sharply during July. Total holdings dropped by $50.4 billion to $9.248 trillion, the lowest reading since October 2025. China and Japan accounted for part of the decline as both reduced their positions.

The move mattered because foreign buyers remain important participants in US government debt markets. However, the July data did not show a broad foreign exit from US assets.

Treasury International Capital data recorded an overall net inflow of $83.7 billion during the month. July holdings also remained above the $9.110 trillion level recorded one year earlier. That comparison points to shorter-term repositioning rather than a simple annual retreat.

US Treasury Holdings Fall for Fourth Month in Five

The Treasury’s Major Foreign Holders table showed four monthly declines during the five months through July. Total foreign holdings dropped by $239.2 billion from February’s $9.487 trillion level.

Japan remained the largest foreign holder despite reducing its position by $12.8 billion. Its holdings ended July at $1.104 trillion, their lowest level since January 2025. Japan held $1.239 trillion in February before reducing its exposure in subsequent months.