Infographic: Japan Is the Largest Foreign Holder of U.S. Treasuries (2024)

FAQs

Is Japan the largest holder of U.S. Treasuries? ›

Japan, the largest non-U.S. holder of Treasuries, increased its U.S. government debt to $1.167 trillion, the largest since August 2022 when the country's holdings were at $1.196 trillion.

The three largest holders of Treasuries -- Japan, China and the UK -- led the purchase U.S. government debt.

Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

Among other countries, Japan and China have continued to be the top owners of US debt during the last two decades. Since the dollar is a strong currency that is accepted globally, holding a substantial amount of US debt can be beneficial.

Of the total held by foreign countries, Japan and Mainland China held the greatest portions, with China holding 797.7 billion U.S. dollars in U.S. securities. Other foreign holders included oil exporting countries and Caribbean banking centers.

The Federal Reserve, which purchases and sells Treasury securities as a means to influence federal interest rates and the nation's money supply, is the largest holder of such debt.

Around 70% of Japanese government bonds are purchased by the Bank of Japan, and much of the remainder is purchased by Japanese banks and trust funds, which largely insulates the prices and yields of such bonds from the effects of the global bond market and reduces their sensitivity to credit rating changes.

If China (or any other nation that has a trade surplus with the U.S.) stops buying U.S. Treasuries or even starts dumping its U.S. forex reserves, its trade surplus would become a trade deficit—something which no export-oriented economy would want, as they would be worse off as a result.

(Bloomberg) -- China sold a record amount of Treasury and US agency bonds in the first quarter, highlighting the Asian nation's move to diversify away from American assets as trade tensions persist.

How much of US debt does China own? ›

China owns around 2.6% of U.S. debt, which it buys because the Chinese yuan is pegged to the dollar. It would be impossible for China to call in all its U.S. debt at once, given the different maturity dates of the U.S. securities that China owns. United States Department of Treasury.

India takes the top spot. The world's most populous country owed $38.3bn to the WB at the end of 2022, down by almost $1.5bn from a year earlier.

Japan is the world's largest foreign holder of Treasuries, but its footprint in the Treasuries market is tiny compared to what it once was. According to Treasury International Capital figures, Japan held $1.17 trillion in U.S. Treasury securities at the end of February.

The largest holder of U.S. debt is the U.S government. Which agencies own the most Treasury notes, bills, and bonds? Social Security, by a long shot. The U.S. Treasury publishes this information in its monthly Treasury statement.

China owns around 2.6% of U.S. debt, which it buys because the Chinese yuan is pegged to the dollar. It would be impossible for China to call in all its U.S. debt at once, given the different maturity dates of the U.S. securities that China owns. United States Department of Treasury.

Experts reckon yen purchases by the Bank of Japan at the behest of the Ministry of Finance are funded by dollar deposits held by the BOJ, which are later replenished by the sale of very short-dated U.S. Treasuries or even bills.

The stock of Japanese direct investment in the U.S. stood at $696.5 billion at the end of 2022, five times the level of investment in China, JETRO reports.