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

How does AI · Europe maintain stability in U.S. Treasury holdings amid political turmoil?

Data released by the U.S. Treasury on Wednesday shows that foreign holdings of U.S. Treasuries increased by $34.8 billion, reaching $9.31 trillion. In January, overseas holdings of U.S. debt 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 Europe’s demand for U.S. assets temporarily increased due to U.S. President Trump’s threats regarding Greenland:

Trump repeatedly threatened to significantly raise tariffs, sparking market concerns that overseas 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. The Netherlands’ largest pension fund, Stichting Pensioenfonds ABP, also sharply reduced its U.S. asset exposure last year.

Major countries and regions’ U.S. Treasury holdings

This rebound was mainly driven by the UK and Japan, while Canada saw a significant decrease, with Canadian holdings typically fluctuating greatly 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 increased its holdings 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, U.S. Treasury Secretary Janet 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,” asserting that U.S. economic policies have strengthened the country’s position as the world’s top destination for capital.

Other Highlights from TIC Data

The U.S. Treasury’s TIC data also shows:

• In January, net outflows of $25 billion from foreign investments in U.S. long-term securities, short-term securities, and banking flows. Private foreign capital outflows totaled $76.1 billion, while official foreign capital inflows were $51.1 billion.
• Foreign investors increased their holdings of U.S. long-term securities by a net $63.5 billion, with private investors net buying $42 billion and official institutions net buying $21.4 billion.
• U.S. residents also increased their holdings of foreign long-term securities by $47.9 billion.
• After adjustments (such as estimates of foreign investment in U.S. stocks via stock swaps), the total net purchase of foreign long-term securities in January is estimated at $15.5 billion.
• Foreign investors reduced holdings of U.S. Treasury bills (short-term debt) by $10.2 billion. Meanwhile, all dollar-denominated short-term securities and other custodial liabilities held by foreigners increased by $17.8 billion.
• Banks’ net dollar-denominated liabilities to foreign investors decreased by $58.3 billion.

The U.S. Treasury’s TIC data for February 2024 is scheduled to be released on April 15, 2026.