China’s US Treasury holdings hit 18-year low in July as French and Canadian holdings fall
Foreign holdings of US government debt fell by US$50.4 billion in July, led by declines in France and Canada, while UK holdings increased
- China's holdings of U.S. government debt fell by $15.4 billion in July, reaching $618 billion, the lowest level in 18 years (since August 2008).
- The decline is part of a broader trend of foreign investors reducing U.S. Treasury holdings, driven by concerns over inflation risks and the U.S. budget deficit.
- China remains the third-largest foreign holder of U.S. debt, though analysts suggest its actual holdings may be higher due to securities held in custody through Belgium.
China’s holdings of US government debt fell to an 18-year low of US$618 billion in July 2026, as foreign holdings of US Treasuries declined for a second consecutive month.
The value of foreign Treasury holdings dropped by US$50.4 billion from June to US$9.25 trillion, the lowest since October 2025, according to US Treasury holdings data released on Wednesday, September 16. France and Canada accounted for the largest declines.
Changes in foreign Treasury holdings reflect movements in bond values as well as net purchases and sales. The Bloomberg US Treasury Index fell by more than 1% in July, meaning the reduction in holdings cannot be treated simply as an equivalent amount of net selling.
The decline in foreign holdings came amid concerns that the Iran war would intensify inflation risks, alongside persistent worries about the US budget deficit and the sustainability of government finances.
China’s holdings reach lowest level since August 2008
China, the third-largest foreign holder of US Treasuries, recorded a US$15.4 billion monthly decline in July, taking its holdings to US$618 billion. Chinese financial data provider Wind put that figure at the lowest since August 2008, when China held US$573.7 billion.
Belgium’s reported US Treasury holdings also fell in July, reaching US$470.7 billion. Market analysts say some holdings attributed to Belgium include securities held in custody for China.
French and Canadian holdings fall while UK total rises
France’s US Treasury holdings fell by US$41.5 billion from June to US$348.4 billion in July. Canada recorded a US$33.3 billion decline over the same period, leaving its holdings at US$426.3 billion.
The UK moved in the opposite direction, with US Treasury holdings increasing by US$58.4 billion in July to US$998.3 billion. Britain remained the second-largest foreign holder.
Japan’s holdings decline during yen intervention
Japan remained the largest foreign holder of US Treasuries despite a US$12.8 billion monthly decline in July, which brought its holdings to about US$1.1 trillion.
Japanese authorities intervened in currency markets to support the yen in July. Data from Japan’s Ministry of Finance suggested the government probably sold some foreign securities to finance the intervention.
US Treasury Secretary Scott Bessent previously said one possible reason for Washington joining Tokyo’s yen-buying intervention on July 31, 2026, was to reduce Japan’s need to sell US assets.
