The monthly Treasury data landed on Wednesday, September 16, 2026, and it showed a second straight month of foreign investors pulling back from US government debt. Total foreign holdings dropped by $50.4 billion in July, settling at $9.25 trillion, the weakest reading since October 2025.
The headline number belonged to China. Its holdings of US Treasuries fell $15.4 billion over the month to $618 billion, the lowest in 18 years. The last time the stockpile sat that low was August 2008, when it stood at $573.7 billion, according to the Chinese financial data provider Wind. China remains the third-largest foreign holder, and analysts suspect the true figure runs higher, since some securities attributed to Belgium are widely believed to be held in custody for China. Belgium’s own reported holdings fell in July to $470.7 billion.
France and Canada Led the Exits
The biggest monthly moves came from two US allies. France shed $41.5 billion, finishing July at $348.4 billion, and Canada cut $33.3 billion to land at $426.3 billion. The UK swam against the tide, adding $58.4 billion to reach $998.3 billion and keeping its spot as the second-largest foreign holder.
Japan still tops the table, though its holdings slipped $12.8 billion to roughly $1.1 trillion. The mechanics there are specific: Japanese authorities stepped into currency markets in July to prop up the yen, and data from Japan’s Ministry of Finance suggests Tokyo most likely sold foreign securities to fund the operation. Treasury Secretary Scott Bessent had said one possible reason for Washington joining Tokyo’s July 31, 2026 yen-buying intervention was to spare Japan the need to dump US assets.
Selling, or Just Valuation?
One caution belongs next to all these numbers. Holdings figures move with bond prices as well as with actual buying and selling, and the Bloomberg US Treasury Index lost more than 1% in July. The drop in reported holdings is therefore not a clean measure of net selling.
The backdrop, though, is real enough: investors are weighing inflation risks tied to the Iran war alongside persistent unease about the US budget deficit and the long-term health of government finances. For now, the direction of travel in the data is one way, and China’s slow walk down from its post-crisis peak has reached a milestone not seen since before Lehman.
