Data released by the US Treasury on Tuesday shows that foreign holdings of US Treasury securities increased by $18.5 billion in May, reaching a total of $9.37 trillion. This marks the second-highest level on record. The previous month saw an increase of $3.9 billion.
These figures reflect not only net transactions for the month but also valuation changes due to price movements in the bonds. The US Treasury index rose by 0.1% in May, following a slight decline in April.
Market analysts widely believe that Japan's recent intervention in the foreign exchange market, which involved selling dollars and buying yen to support its currency, likely involved selling some US Treasury holdings to raise dollar funds.
Holdings by Major Nations and Regions
The overall increase in foreign holdings was primarily driven by a significant rise in Canadian holdings, while Japan reduced its position.
Canada's holdings increased by $38.7 billion, rising to $435.8 billion, making it the country with the largest monthly increase.
Japan, the largest foreign holder of US debt, reduced its holdings by $66.8 billion in May, bringing its total down to $1.14 trillion.
The United Kingdom, the second-largest holder, increased its holdings by $11.1 billion to $948.6 billion. Mainland China, ranked third, increased its holdings by $8.2 billion to $659.3 billion.
Other Key Points from TIC Data
The Treasury International Capital (TIC) data also revealed the following details for May 2026:
Combined net TIC inflows for long-term securities, short-term US securities, and banking flows totaled $132.2 billion. This consisted of net private foreign inflows of $172.0 billion and net official foreign outflows of $39.9 billion.
Foreign investors increased their holdings of US long-term securities, with net purchases of $262.8 billion. This included net purchases of $246.8 billion by private foreign investors and $16.1 billion by foreign official institutions.
US residents increased their holdings of foreign long-term securities, with net purchases of $30.1 billion.
After including adjustments, such as estimated foreign investment in US stocks via stock swaps, the overall net foreign purchases of US long-term securities in May are estimated at $232.7 billion.
Foreign holdings of US Treasury bills decreased by $43.5 billion in May.
Foreign holdings of all dollar-denominated short-term US securities and other custody liabilities decreased by $30.6 billion.
US banks' own net dollar-denominated liabilities to foreign residents decreased by $70.0 billion.
The TIC data for June of this year is scheduled for release on August 17, 2026.
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