Foreign investors' holdings of U.S. Treasury bonds rose in January, a month that saw growing concerns about European demand for U.S. assets amid U.S. President Donald Trump's threats regarding Greenland.
Data released by the Treasury Department on Wednesday showed that total foreign holdings increased by $34.8 billion to $9.31 trillion. This figure reflects both net sales and valuation changes. A Bloomberg index of the U.S. Treasury securities market also showed little change in January after a decline in December.
The January increase followed a decline of $88.3 billion the previous month. Britain and Japan led the recovery, while Canada, whose holdings are more volatile from month to month, saw a notable drop.
Japan, the largest foreign holder of US Treasury securities, saw its holdings rise by $39.8 billion to $1.23 trillion. The United Kingdom, the second-largest holder, also saw its holdings increase by $29.3 billion to $895.3 billion.
China and Europe's moves in the US bond market
China's holdings of Treasury securities, the third-largest share, rose by $10.9 billion to $694.4 billion. Conversely, Belgium's holdings, which include Chinese custodian accounts according to market analysts, fell by $26.3 billion to $451 billion.
At the EU level, holdings rose by $8 billion to $2.13 trillion. In January, as Trump pressured Denmark over Greenland, a Danish pension fund warned it was planning to divest from its US Treasury bond holdings.
That same month, Treasury Secretary Scott Bisent dismissed speculation that Europe might abandon U.S. government bonds, calling it a false narrative. He added that it defied all logic.
