Foreign demand for US Treasuries has held up in aggregate over the past year, yet the composition of that demand has shifted sharply. Central banks and government entities led a $72 billion fall in foreign holdings in June, cutting their positions by $70 billion to $3.78 trillion, the lowest level since February 2024.
Total foreign holdings fell to $9.30 trillion in June, the lowest since January. There have been three monthly declines in the past four months, amounting to $190 billion in reductions. Foreign countries then held $9.25 trillion in US government debt in July, down from $9.3 trillion in June, marking a second consecutive monthly decline.
The June figures contrast with the annual comparison. Total foreign holdings rose from about $9.094 trillion in June 2025 to $9.299 trillion in June 2026, an increase of about 2.3 percent. That gain masks reductions by official investors, whose June sales accounted for nearly all foreign selling during the month.
China’s holdings fell to $618 billion in July from $633.4 billion in June, their lowest recorded level since August 2008. China had reduced its holdings by $26 billion to $633 billion in June, the lowest level since September 2008. From June 2025 to June 2026, its holdings declined by $98 billion.
Japan remained the largest foreign holder despite reducing its Treasury holdings by $26 billion in June to $1.12 trillion, the lowest since January 2025. Its holdings were down $38.1 billion from June 2025 to June 2026. Japan then reduced its position to $1.1 trillion in July from $1.12 trillion in June.
The Treasury Department’s figures placed the UK as the second-largest holder. Its holdings fell by $9 billion to $940 billion in June, a level described as the second-largest on record. The UK’s holdings subsequently increased to $998.3 billion from $939.9 billion.
Brazil reduced its Treasury holdings by $47 billion between June 2025 and June 2026. India cut its holdings by $41 billion over the same period, while Switzerland reduced its position by $15.7 billion. China, Brazil, India, Japan and Switzerland recorded the five largest individual declines among major foreign holders listed by the Treasury Department over that year.
The figures point to a divide between official institutions and foreign investors as a whole. Some countries increased their holdings, including the UK, Belgium and Ireland, even as the largest official holders reduced theirs. The available data do not establish the reasons for each country’s transactions or whether there was any co-ordination among major holders.
Custody data show the scale of the decline among foreign official entities over a longer period. US Treasury securities held in custody by foreign official entities stood at 2,634,150 million dollars in July 2026, down from 2,954,639 million dollars at end of 2023.
Concerns over the sustainability of Washington’s finances have weighed on the market. The data do not show how far recent Treasury yields influenced official sales, whether the moves reflected portfolio rebalancing, or whether reserve managers intend to continue reducing exposure. They also do not show the contribution of each country to the $190 billion decline over the past four months.
For now, the clearest pattern is a sustained retreat by several major official holders, led by China and Japan, alongside continuing demand from other foreign investors. The annual rise in total foreign holdings therefore gives only a partial account of the market for US government debt.
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