Japan tops China as largest holder of US Treasury debt

Japan surpassed China to become the largest foreign owner of U.S. Treasury securities in October as total foreign holdings fell for a fourth month.

The Treasury Department says that total foreign holdings dropped 1.9 percent to $6.04 trillion in October. Foreign holdings of Treasury debt are down 3.9 percent from a recent peak of $6.28 billion set in March.

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Both Japan and China cut their portfolios in October. But China's reduction was a larger 3.6 percent to $1.12 trillion. Japan trimmed its holdings by a smaller 0.4 percent, which meant its holdings of $1.13 trillion exceeded China's total.

Total federal government debt now stands at $19.8 trillion and is projected to rise by $8.6 trillion over the next decade, underscoring America's need to keep attracting foreign investors.