US Treasuries Have Become Unappetizing for Foreign Central Banks and Governments

Foreign central banks and governments have significantly reduced their holdings of US Treasury securities, which fell to $3.77 trillion in July—their lowest share of total outstanding Treasuries since 1993 at just 12.8%, down from 38% in 2007-2009. This shift reflects that US Treasuries have become less attractive to official foreign holders, while the US has become less dependent on them for financing its deficits, instead relying more on opaque foreign financial centers that hold US hedge funds' and corporations' assets. Japan notably shed $135 billion in Treasury holdings from February through July to fund yen-supporting currency interventions.