Foreign holdings of U.S. Treasuries rebounded from a trough in August, with U.K. holdings topping $1 trillion for the first time.

Note that data released by the U.S. Treasury Department on Friday showed that foreign holdings of U.S. Treasuries rebounded in August, with Canada and Belgium leading the increase, as foreign holdings recovered from their lowest level since October 2025. According to Treasury data, foreign holdings rose by more than $83 billion from July, bringing the total to $9.33 trillion. The foreign holdings data includes valuation changes as well as net buying and selling. The Bloomberg U.S. Treasury Index rose 0.3% in August, then fell in September amid concerns over persistent inflation and a new Federal Reserve rate-hiking cycle. Japan, the largest foreign holder of U.S. Treasuries, saw its holdings fall by $36 billion in August to $1.1 trillion, the lowest since December 2024. Japanese officials intervened in the foreign exchange market throughout the summer, buying yen as the currency fell to its weakest level against the dollar in four decades. Japanese data last month showed that Tokyo may have sold some of its U.S. Treasury and other securities holdings. Friday's report showed that mainland China, the third-largest holder of U.S. Treasuries, reduced its holdings by $27 billion in August to $591 billion, an 18-year low. Some analysts said the Chinese government may have conducted some U.S. securities transactions through channels in other countries, including Canada. Canada's holdings increased by $38 billion to nearly $465 billion; Belgium added nearly $20 billion, bringing its total to about $491 billion. The U.K., the second-largest holder of U.S. Treasuries, increased its holdings by $11 billion in August, surpassing the $1 trillion mark for the first time.