• Bloomberg


Japan and China increased their holdings of U.S. Treasuries as overall net foreign purchases in March reached their strongest level in a year.

China increased its ownership of U.S. government bonds, notes and bills to $1.09 trillion in March, up $27.9 billion and remaining the second-largest foreign holder of American debt, according to a monthly Treasury Department report released Monday.

Japan, the largest non-U.S. holder of government debt, increased its total to $1.12 trillion, up $3.4 billion from a month earlier.

Total foreign ownership of U.S. Treasuries amounted to about $6.08 trillion in March — the highest since September but down from a peak of $6.3 trillion a year earlier. Net purchases of U.S. Treasury bonds and notes by foreigners were $24.4 billion, the data show.

Demand by overseas creditors for U.S. debt played a key role as the nation borrowed to revive its economy from the last recession.

The rise in China’s Treasury holdings comes even as the nation tries to stem capital outflows and buttress the yuan through interventions in the currency market. The country’s foreign currency reserves ticked up for third month to $3.03 trillion in April, after falling below $3 trillion in January. They are still down sharply from a record $4 trillion in 2014.

Belgium’s ownership of Treasuries, often seen as a home to China’s custodial accounts, rose in March to $109 billion.

The report, which also contains data on international capital flows, showed net foreign buying of long-term securities totaling $59.8 billion in March. It showed a total cross border outflow, including short-term securities such as Treasury bills and stock swaps, of $700 million.

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