Foreign holdings of US Treasury bonds recovered in August from their lowest level since October 2025, while increased positions in Canada and Belgium were the main driving factor. According to data released by the US Treasury Department on Friday, total overseas holdings in that month increased by more than 83 billion US dollars compared to July, reaching 9.33 trillion US dollars. Foreign position data includes net trading and valuation changes. The Bloomberg US Treasury Index rose 0.3% in August, then fell due to market concerns about stubborn inflation and the Federal Reserve starting a new round of interest rate hikes. As the largest foreign holder of US Treasury bonds, Japan reduced its holdings by 36 billion US dollars to 1.1 trillion US dollars, hitting the lowest level since December 2024. The Japanese authorities took steps this summer to support a severely weakened domestic currency. The country's data last month showed that Tokyo may have sold some foreign securities, including US bonds, to raise funds for an unprecedented foreign exchange intervention. The UK is the second-largest holder. Its holdings increased by $11 billion in August, breaking the $1 trillion mark for the first time.

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