Global Treasuries Surge to Record $9.49 Trillion

Foreign investors lifted their holdings of U.S. Treasury securities to a new record in February, reaching $9.49 trillion, according to data released Wednesday by the Treasury Department. The total rose 2.1% from $9.29 trillion in January, marking a second straight monthly increase. The figures point to continued overseas appetite for U.S. government debt as expectations around Federal Reserve interest-rate policy shift.

Japan remained the largest foreign holder of Treasuries. Its position climbed to $1.239 trillion in February, the highest level since February 2022. The data aligns with ongoing demand from Japanese institutions that have sought higher returns outside Japan, where interest rates have been low, and where currency-hedged returns have improved, according to the source material.

The United Kingdom held onto its position as the second-largest foreign owner and increased its Treasury holdings by 2% to $897.3 billion in February. China, the third-largest holder, moved in the opposite direction, trimming its exposure slightly to $693.3 billion. The source material also states China’s Treasury holdings have fallen by 9% since January 2025, a shift described as consistent with a broader effort to diversify away from U.S. assets amid geopolitical tensions.

The February rise in foreign demand occurred alongside a drop in the benchmark 10-year Treasury yield, which declined from approximately 4.277% to 3.962% over the period cited. The same dataset showed total net capital inflows of $184.5 billion for the month, following preliminary net outflows of $25 billion in January. Together, the holdings and flow data provide a snapshot of cross-border positioning in U.S. assets during a period of changing rate expectations.

For global markets, Treasuries remain a central reference point for pricing risk-free rates and for managing liquidity, collateral, and reserves across financial systems. The latest figures highlight that demand is not uniform across major holders, with increases from Japan and the United Kingdom occurring at the same time as a continued reduction from China since January 2025, as described in the source material.

Key uncertainties remain around how future shifts in Federal Reserve policy expectations and global interest-rate differentials may influence foreign demand. The Treasury Department data captures positions and flows for February, but it does not, by itself, specify the motivations behind each country’s changes beyond what is described in the source material.

The next releases will be watched for whether the second consecutive monthly rise extends further and whether the distribution among top holders continues to diverge.