Foreign holdings of US Treasuries in April show modest fall from peak

Foreign investors' holdings of U.S. Treasuries showed a modest decline in April from record levels of U.S. debt, data from the Treasury Department showed on Wednesday, indicating there was not a significant sell-off even as back-and-forth tariff policy from President Donald Trump sideswiped markets.

Holdings of U.S. Treasuries dropped to $9.013 trillion from an all-time peak of $9.049 trillion in March, the first decline in five months. Compared with a year earlier, Treasuries owned by foreigners were still up 12%.

The chaos came after tariffs were announced on April 2, causing a slide in equities and the dollar and volatility in U.S. Treasuries. Treasuries initially saw some safe-haven buying in the first week of April, before selling ensued in the following weeks.

"In terms of any big concern about a huge wave of selling of Treasuries, that's really not what we're seeing in this data," said Zachary Griffiths, head of investment grade and macro strategy at CreditSights in Charlotte. "It was a pretty modest move."

Japan remained the largest non-U.S. holder of Treasuries, with $1.134 trillion in April, up slightly from $1.13 trillion in the previous month.

UK investors, the second largest owner of U.S. government debt, pushed their stash to $807 billion, up from $779 billion in March.

China, on the other hand, the third largest, reduced its holdings to $757.2 billion in April in a second straight month of declines, hitting their lowest level since February 2009 when the country's stock of Treasuries dropped to $744.2 billion.

Treasury holdings by Chinese investors have been on a downward trajectory since 2018, analysts said.

Canadian investors were the biggest sellers of Treasuries in April, with their holdings falling $58 billion to $368.4 billion.

Trump has hit Canada with a slew of tariffs on steel, aluminum and automobiles, and Canada has retaliated with its own set of duties.

On a transactional basis, holdings of Treasury bonds and notes showed a net outflow of $40.8 billion in April from a net inflow of $123 billion in March.

Foreign investors, however, continued to buy U.S. corporates, with $18.9 billion in purchases following $60.4 billion in inflows in March.

U.S. equities, meanwhile, were sold off as well, posting outflows of $18.8 billion in April, from $10.4 billion inflows in March.