Foreign Holdings of U.S. Treasuries Slide to a Nine-Month Low as Yields Whipsaw

Huo Xing Finance reported on Sept. 17 that the latest U.S. Treasury International Capital (TIC) data show foreign investors held $9.25 trillion in U.S. Treasuries at the end of July, down $50.4 billion from June and the lowest level since October 2025. The drop in reported holdings does not necessarily point to broad-based overseas selling. The market value of positions also moves with bond prices, exchange rates and net purchase activity. In July, foreign residents were net buyers of $40.6 billion in U.S. long-term securities. Official institutions posted net purchases of $44.4 billion and increased holdings of U.S. Treasury bills by $38.8 billion. In total, foreign capital generated a net inflow of $83.7 billion into U.S. financial markets for the month. Among major holders, trends diverged. Japan trimmed its Treasury holdings by $12.8 billion to around $1.1 trillion. China reduced its holdings by $15.4 billion to $618 billion. The United Kingdom boosted its holdings by $58.4 billion to $998.3 billion, edging closer to the $1 trillion mark. France and Canada cut their holdings by $41.5 billion and $33.3 billion, respectively. The U.S. 10-year Treasury yield has recently climbed back above 5%. Higher yields raise potential returns on Treasuries, while also signaling that investors are demanding more compensation for inflation risk, fiscal deficits and term risk. Markets are now watching whether a 5% handle can again draw foreign capital into U.S. Treasuries.