Foreign investors buy US Treasuries at near-record $34.8B, led by Japan amid market strains.

Foreign investors increased their holdings of US government debt by $34.8 billion in January, pushing total foreign ownership to $9.3 trillion. Japan led the surge, buying $39.8 billion to hold $1.2 trillion, the highest since mid-2022, followed by the UK and the EU. Despite this demand, the Treasury market faces challenges from inflation and rising yields, which raise borrowing costs and threaten traditional portfolio strategies. Meanwhile, China continues to reduce its US debt holdings amid geopolitical tensions, signaling a shift in global financial dynamics.