US Treasury Holdings Abroad Rise in January

Foreign holdings of U.S. Treasury bonds increased in January. During the month, concerns about Europe’s demand for U.S. assets temporarily intensified.

Data released by the U.S. Treasury Department on Wednesday showed that foreign holdings of U.S. Treasury bonds rose by $34.8 billion to $9.31 trillion. The data also reflect net buying and valuation changes. A Bloomberg U.S. Treasury market index was roughly flat in January after declining in December.

Previously, in December, foreign holdings of U.S. Treasury bonds had decreased by $88.3 billion. The January rebound was mainly driven by the UK and Japan, while Canada — which experienced significant monthly fluctuations — saw a notable decline.

Japan, the largest foreign holder of U.S. Treasuries, increased its holdings by $39.8 billion to $1.23 trillion. The second-largest holder, the UK, increased holdings by $29.3 billion to $895.3 billion.

China, the third-largest holder, increased holdings by $10.9 billion to $694.4 billion. Belgium’s holdings decreased by $26.3 billion to $451 billion. Market analysts note that Belgium’s holdings include Chinese custodial accounts.

European Holdings

The EU’s total holdings increased by $8 billion to $2.13 trillion. In January, amid tensions over Greenland, Denmark’s pension fund warned of plans to sell its U.S. Treasury holdings.

U.S. Treasury Secretary Janet Yellen dismissed speculation about Europe potentially selling U.S. Treasuries, calling it a “false narrative.” She also stated that “this is completely illogical.”