Japan overtook China in February as the top foreign holder of U.S. Treasury securities, a position Japan last held in August 2008.
In its monthly report on bond holdings, the Treasury Department said Wednesday total foreign holdings of Treasury debt dipped 0.9 percent in February to $6.16 trillion, down from a record of $6.22 trillion in January.
The holdings of China, normally the top holder of Treasury debt, slipped 1.2 percent to $1.22 trillion. Japan’s fell 1.1 percent from January. China’s decline was a bit larger, allowing Japan to jump into the top spot, $700 million above China.
China overtook Japan for the top spot in ownership of U.S. Treasury debt in 2008 as the financial crisis and a deep recession pushed up U.S. government borrowing to finance government deficits. The U.S. deficit topped $1 trillion annually for four consecutive years.
Private analysts had been forecasting that Japan would surpass China’s holdings of Treasury debt this year given current economic trends in both nations.