On Thursday, January 15th, Eastern Time, the U.S. Department of the Treasury released the International Capital Flows (TIC) report, revealing that foreign holdings of U.S. Treasury securities surged to a record high in November of last year. Norway, Canada, and Saudi Arabia were the primary drivers behind the increase in U.S. Treasury holdings for the month.
Specifically, the total holdings of U.S. Treasury securities by foreign countries and regions outside the U.S. increased by $112.8 billion in November, reaching $9.36 trillion. This figure reflects both net transactions and valuation changes. The Bloomberg U.S. Treasury Market Index indicated that the U.S. Treasury market had risen for the fourth consecutive month in November.
Data on U.S. Treasury holdings is under intense scrutiny, as markets worry that certain trade and foreign policy initiatives by U.S. President Trump could potentially weaken foreign confidence in U.S. assets. Some analysts have pointed out that the sharp rise in gold prices may signal a global effort to reduce dependence on the U.S. dollar and diversify assets.
U.S. Treasury Secretary Scott Bessent has consistently dismissed concerns about a "sell-off of America." He previously stated, "We have recently seen very, very strong foreign demand. Our Treasury bill auctions have never been more solid, particularly the demand from overseas buyers."
The latest TIC data reflects foreign investor demand for U.S. debt since President Trump initiated large-scale tariff increases last year. Overseas demand for U.S. Treasuries has always been a focal point for the bond market, especially since Trump took office. Future TIC data will be closely monitored. Currently, foreign funds and various governments hold over 30% of the total U.S. Treasury securities outstanding.
After President Trump announced reciprocal tariff measures on April 2nd of last year, financial market turbulence ensued, leading to the most severe sell-off in the $29 trillion U.S. Treasury market since 2001.
Japan remains the largest foreign holder of U.S. Treasury securities, with its holdings increasing by $2.6 billion in November to $1.20 trillion, the highest level since July 2022.
Japan has been consistently increasing its holdings of U.S. debt in recent months. Industry insiders previously noted, "The most striking situation is Japan's. Japan's continued purchases of U.S. Treasuries could be a factor in the persistent weakness of the yen and may also indicate that Japanese investors remain cautious about Japanese government bonds despite rising domestic yields."
The United Kingdom is the second-largest foreign holder of U.S. debt, with its U.S. Treasury holdings increasing by $10.6 billion in November to $888.5 billion.
Mainland China is the third-largest foreign holder of U.S. Treasury securities. Its holdings decreased by $6.1 billion in November compared to the previous month, falling to $682.6 billion, the lowest level since 2008. Since April 2022, Mainland China's holdings of U.S. debt have remained below $1 trillion.
Analysis generally suggests that, given the changes in Sino-U.S. relations and the trend towards diversifying foreign reserve asset allocations, China's holdings of U.S. Treasuries are likely to continue declining steadily. Future fluctuations in China's holdings will largely continue to be influenced by the state of Sino-U.S. relations.
In recent years, Mainland China's reduction of U.S. Treasury holdings has been driven more by the need to diversify its foreign reserve asset allocations. Increasing the proportion of gold holdings is one manifestation of this diversification effort.
Data released earlier this month showed that China's gold reserves at the end of December stood at 74.15 million ounces, an increase of 30,000 ounces from the end of November. This marks the 14th consecutive month that the People's Bank of China has increased its gold reserves since November 2024.
Belgium's holdings increased by $12.6 billion to $481.0 billion. Canada's holdings saw a significant increase of $53.1 billion in November, reaching $472.2 billion. Data for Canada has shown considerable volatility this year, with monthly changes often exceeding $50 billion.
Furthermore, both Norway and Saudi Arabia increased their U.S. Treasury holdings by over $10 billion in November: Norway's holdings increased by $25.2 billion, while Saudi Arabia's U.S. Treasury holdings rose by $14.4 billion.
The U.S. Treasury's TIC data also revealed the following key points:
In November, the total net inflow of foreign capital into U.S. long-term securities, short-term U.S. securities, and banking flows was $212.0 billion. Of this, net inflows from the foreign private sector amounted to $167.2 billion, and net inflows from foreign official institutions were $44.9 billion.
Foreign residents increased their holdings of U.S. long-term securities in November, with net purchases totaling $221.8 billion. Net purchases by foreign private investors were $157.8 billion, while net purchases by foreign official institutions were $64.0 billion.
U.S. residents also increased their holdings of foreign long-term securities, with net purchases amounting to $1.6 billion.
After incorporating relevant adjustments (such as estimates of foreign investment in U.S. stocks through stock swaps), the overall estimated net foreign acquisition of U.S. long-term securities in November was $220.2 billion.
Foreign residents' holdings of U.S. Treasury bills increased by $400 million. However, foreign residents' holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $6.5 billion.
U.S. banks' own dollar-denominated net liabilities to foreign residents decreased by $1.7 billion.
The TIC data for December of last year from the U.S. Treasury is scheduled to be released on February 18, 2026.
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