Overseas U.S. Treasury holdings fall to a 9-month low, testing whether 5% yields can reignite 'magnet' appeal.

BlockBeats news, September 17 — The latest U.S. Treasury TIC data shows that as of the end of July, the scale of U.S. Treasuries held by foreign investors fell to $9.25 trillion, down $50.4 billion from June, the lowest since October 2025. However, the decline in holdings does not mean concentrated selling of U.S. Treasuries by overseas funds; bond prices, exchange rates, and changes in net purchases and sales can all affect the market value of holdings.

In July, foreign residents still net purchased $40.6 billion of U.S. long-term securities, of which official institutions net purchased $44.4 billion, while also increasing their holdings of U.S. Treasury bills by $38.8 billion. For the month, foreign capital as a whole still brought a net inflow of $83.7 billion into U.S. financial markets.

Major holders showed divergence. Japan reduced its U.S. Treasury holdings by $12.8 billion in July, bringing its holdings down to about $1.1 trillion; China reduced its holdings by $15.4 billion to $618 billion; the United Kingdom instead increased its holdings by $58.4 billion to $998.3 billion, approaching $1 trillion. France and Canada reduced their holdings by $41.5 billion and $33.3 billion, respectively.

At the same time, the yield on the U.S. 10-year Treasury note has recently broken back above 5%. On the one hand, higher yields increase the potential returns on U.S. Treasuries; on the other hand, they also reflect the market's demand for higher compensation for U.S. inflation, fiscal deficits, and duration risk. The market will next focus on whether a 5% yield can once again attract overseas funds to increase their allocation to U.S. Treasuries.