Japan's purchases of U.S. Treasuries helped it overtake China last June as the largest foreign holder of American securities, including equities, asset-backed paper and U.S. government debt, Treasury Department figures show.
Tokyo's total holdings of all types of U.S. securities grew to $1.84 trillion at the end of June 2012, up from $1.59 trillion a year earlier, fueled in part by purchases of $227 billion worth of federal government debt during the 12-month period. Meanwhile, China's holdings fell to $1.59 trillion from $1.73 trillion during the same period, as Beijing looked to sell Treasuries.
"Japan has been gaining all along," said Jim Vogel, head of agency debt research at FTN Financial in Tennessee. He added that "in a slow economy," U.S. securities have "been an investment of choice."