Foreign Holdings of U.S. Treasuries Hit Record High in February

(Bloomberg) -- The latest snapshot of U.S. government debt held outside the country shows holdings climbed to a fresh record high in February, before the coronavirus pandemic started herding investors into the world’s largest and most liquid market.

The Treasury’s report, released on Wednesday, showed total foreign ownership of Treasuries rose $209.7 billion from January, to $7.067 trillion. The release largely pre-dates the global spread of Covid-19, and while China was already feeling its toll with much of the population under quarantine, economic data had yet to show the hit to growth. Next month’s update could show more volatility, judging by the Fed’s report of a record $109 billion drop in custody holdings over March.

China’s holdings -- the largest after Japan’s -- rose $13.7 billion to a four-month high of $1.1 trillion in February, a month in which the yuan remained resilient and there was little sign of intervention.

The Treasury’s release Wednesday showed Japan’s pile of U.S. Treasury securities hit an all-time high of $1.27 trillion in February after $1.21 trillion a month earlier. Japan and China each still hold more than the rest of the top five combined -- the U.K., Brazil, and Ireland -- though U.K. holdings climbed to an all-time high of $403.2 billion.

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