US Treasury Holdings Increase Among Foreign Investors in January, Japan Leads, Greenland Threat Yet to Impact European Holdings

U.S. Treasury Department data released on Wednesday showed that foreign holdings of U.S. debt increased by $34.8 billion to $9.31 trillion. In January, overseas holdings of U.S. Treasuries rose after a decline of $88.3 billion the previous month. The data also reflect net buying and valuation changes. The U.S. Treasury Bond Index was flat in January after a decline in December.

In January, concerns about European demand for U.S. assets intensified when U.S. President Trump issued threats over Greenland:

Trump repeatedly threatened to significantly raise tariffs, sparking worries that foreign investors might sell off U.S. assets and dollars.

As Trump pressured Denmark over Greenland, a Danish pension fund warned in January that it planned to exit its U.S. Treasury holdings. Europe’s largest pension fund, Stichting Pensioenfonds ABP in the Netherlands, also sharply reduced its U.S. asset exposure last year.

Major Countries and Regions’ U.S. Treasury Holdings

The increase was mainly driven by the UK and Japan, while Canada saw a noticeable decline, as Canadian holdings tend to fluctuate significantly month to month.

As the largest foreign holder of U.S. Treasuries, Japan’s holdings increased by $39.8 billion in January to $1.23 trillion.

The UK, ranked second, increased holdings by $29.3 billion in January to $895.3 billion.

Mainland China’s holdings rose by $10.9 billion in January to $694.4 billion.

Overall, EU countries increased their holdings by $8 billion to $2.13 trillion. In January this year, U.S. Treasury Secretary Yellen dismissed speculation that Europe might sell U.S. Treasuries, calling it a “misconception” and stating it is “completely illogical.” Yellen repeatedly refuted claims of “selling U.S. assets,” emphasizing that U.S. economic policies have strengthened the country’s position as the world’s top destination for capital.

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