Foreign holdings of US Treasuries steady in January, up from year earlier

Foreign holdings of U.S. Treasuries held steady in January from the previous month, rising from levels a year earlier, data from the Treasury Department showed on Wednesday, suggesting demand for government debt in the world’s largest economy remained intact.

Holdings of U.S. Treasuries tallied at $8.526 trillion in January, unchanged from the previous month. Compared with a year earlier, Treasuries owned by foreigners rose 7.2%. In September, foreign-held Treasuries hit a record $8.679 trillion.

The benchmark 10-year Treasury yield started January at 4.575% and ended the month slightly lower at 4.567%.

Japan remained the largest non-U.S. holder of Treasuries, with holdings of $1.079 trillion in January, up nearly $20 billion from December’s holdings, data showed.

China’s pile of Treasuries, on the other hand, also increased to $760.8 billion in January, from $759 billion in December. The December holdings were the lowest since February 2009 when the country’s stock of Treasuries dropped to $744.2 billion.

U.S. Treasury holdings by the world’s second largest economy hit a record high of $1.315 trillion in July 2011. Major U.S. asset classes also showed a mix of inflows and outflows during the month, the data showed. On a transactional basis, holdings of Treasury bonds and notes showed a net outflow of $13.3 billion in January, following net selling of $49.7 billion in December.

However, foreign investors continued to buy U.S. corporates and agencies to the tune of $24.1 billion and $500 million, respectively in January.

U.S. equities, meanwhile, posted outflows of $11.1 billion in January, down from a $62.1 billion inflow the month before, according to the Treasury Department data.

Overall, net foreign acquisitions of long- and short-term securities, including banking flows, showed a net outflow of $48.8 billion in January, a big turnaround from $103.2 billion in inflows in December.

U.S. residents increased their holdings of long-term foreign securities, with net purchases of $45.4 billion for the month, up from $8 billion in December.