Foreign holdings of U.S. Treasuries reached an unprecedented high in July, according to the latest data from the U.S. Treasury Department. The total value of foreign-owned U.S. Treasuries climbed to $9.159 trillion, marking a third consecutive month of record-breaking figures. This surge was primarily driven by increased investments from Japan and the United Kingdom, which solidified their positions as the top non-U.S. holders of American government debt. Japan’s holdings rose to $1.151 trillion, the highest since March 2024, while the UK’s holdings grew by approximately 5% to nearly $900 billion. In contrast, China continued to reduce its exposure to U.S. Treasuries, with holdings dropping to $730.7 billion, the lowest level since December 2008. This decline reflects China’s long-term strategy to diversify its reserves and reduce reliance on the U.S. dollar, amid economic challenges and trade tensions. On a transactional basis, the U.S. saw $58.2 billion in foreign inflows of Treasuries in July, rebounding from outflows in June. However, foreign investors sold $16.3 billion in U.S. equities during the same period, signaling a shift in global investment preferences. The net capital inflow into the U.S. also fell sharply to $2.1 billion in July, down from $92 billion in June, highlighting the volatile nature of international capital movements.