【Epoch Times News April 16, 2026】 The latest Treasury International Capital (TIC) data released by the US Department of the Treasury on Wednesday, April 15, revealed that in February, foreign holdings of US Treasury bonds increased to $9.49 trillion, reaching a historic high and growing by 2.1% compared to $9.29 trillion in January. This indicates strong demand for US bonds, considered one of the lowest risk investment tools, despite the market reassessing the Federal Reserve’s interest rate policy outlook.
According to the official TIC report from the US Department of the Treasury, foreign funds were actively involved in both short and long-term US bonds in February.
In terms of long-term securities, foreign inflows into long-term US bonds amounted to a high of $101.1 billion. Among these, foreign private investors bought a net of $147.3 billion, offsetting the $46.1 billion net sales by foreign official institutions such as central banks.
Regarding short-term assets, foreign holdings of US Treasury bills (T-Bills) surged by $91.6 billion in a single month, while the total holdings of short-term US bonds and other custody liabilities denominated in US dollars increased by $87.4 billion.
Combining long-term bonds, short-term bonds, and bank fund flows, February saw a net inflow of $184.5 billion in overall TIC – with a net inflow of $166.5 billion from foreign private sources and $18 billion from foreign official entities. This was a stark contrast to January, which recorded a preliminary net outflow of $25 billion.
Moreover, the increase in overseas demand in February coincided with a drop in the benchmark 10-year US Treasury bond yield from around 4.277% to 3.962%. Compared to the same period last year, foreign holdings of US bonds have increased by 6.6%, reflecting not only the decrease in US bond yields at the beginning of this year but also the relative attractiveness of US Treasury bonds compared to other developed markets.
However, monthly net capital flows may experience significant fluctuations due to the economic impact of the US-led coalition’s bombing of Iran at the end of February on global markets.
The growth in foreign holdings of US Treasury bonds in February was mainly driven by Japan and the UK, which are currently the two largest holders of US government debt.
Japan remains the largest foreign creditor to the US, with holdings rising to $1.239 trillion in February, reaching the highest level since February 2022 (which peaked at $1.303 trillion).
Analysts pointed out that this reflects Japanese institutional investors actively seeking higher yields in US bonds and other financial instruments for 13 out of the past 14 months, driven by the Bank of Japan’s slow exit from ultra-easy policies, low domestic interest rates, and yield increases after currency hedging.
On the other hand, as the second largest holder of US bonds, the UK saw its holdings increase to $897.3 billion in February, up 2% from January. Given the UK’s status as a major global financial custody center, the flow of funds into the country is often seen as an indicator of global hedge fund positioning.
In contrast, China, as the third largest holder of US bonds, continued its trend of reducing holdings over the past few years (accelerating since 2020). In February this year, China slightly lowered its holdings to $693.3 billion, marking a 9% decline in total US bond holdings since January 2025. This reflects China’s long-term trend of de-dollarization.
(Reference: Reuters)