China, Japan increase US Treasury Holdings in February
A Treasury Department report revealed that foreign holdings of Treasuries increased 3 percent in February
Quick overview
- Foreign holdings of US Treasuries increased by 3% in February, countering rumors of sell-offs by China and Japan.
- Japan remains the largest holder of US Treasuries, increasing its holdings by 4% to $1.125 billion.
- China's Treasury holdings rose to $784.3 trillion, marking a 3% increase, making it the second-largest foreign owner.
- Recent trade tensions and tariffs imposed by the US may still lead to changes in foreign Treasury holdings.
A Treasury Department report revealed that foreign holdings of Treasuries increased 3 percent in February, dampening recent rumors that China and Japan were selling off US Treasuries. During the month, both China and Japan saw increases in their holdings. Japan maintained its position as the largest holder, growing its holdings by 4% to $1.125 billion.
China increased its holdings to $784.3 trillion, a 3% increase. China continued to be the second-biggest foreign owner.
The total amount of US Treasury holdings held by foreigners was $8.172 trillion by the end of February.
The rumors that China or Japan was dumping treasuries may still be true because they intensified in April following the implementation of President Trump’s higher-than-expected reciprocal tariffs. The latest data showed both nations were becoming more exposed to US debt before the tariffs were imposed. Japan has not responded to the reciprocal tariffs imposed by the United States; China has.
The United States imposed a 20 percent tariff on China, which is accompanied by a reciprocal 125 percent tariff to combat the fentanyl crisis. China’s import tariffs reached 245 percent if section 301 tariffs on particular Chinese goods are applied.
The Trump administration will be among the first to hold trade talks with Japan, currently subject to a reciprocal tariff of 24 percent from the US. Japan is coming today to negotiate tariffs, and the President will be present.
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