The U.S. government shut down on October 1 and remained closed for a record 43 days before reopening on November 12, after President Donald Trump signed a funding bill into law. The resolution of the shutdown appeared to ease concerns among global investors, supporting renewed demand for U.S. government debt.
Holdings of U.S. Treasuries by foreign investors rose to an all-time high of $9.355 trillion in November, up from $9.243 trillion in October, Treasury Department data released on Thursday showed. On a year-on-year basis, foreign-owned Treasuries were up 7.2%, Reuters reported.
Japan, the United Kingdom, Belgium and Canada led the increase in holdings. Japan remained the largest non-U.S. holder of Treasuries, with its portfolio rising to $1.202 trillion in November. This marked Japan’s highest level since July 2022 and extended an 11-month streak of increases in its Treasury holdings, according to Reuters.
The United Kingdom, the second-largest foreign holder, also increased its exposure, with holdings rising to $888.5 billion, about 1.2% higher than in October. The UK is widely viewed as a key custody hub for global investors and often reflects hedge fund activity, though such funds also route investments through jurisdictions such as the Cayman Islands and the Bahamas, Reuters noted.
Canada posted one of the sharpest monthly increases, boosting its Treasury holdings by 13% to a record $472.2 billion in November. This represented a significant reversal from April, when Canadian holdings fell sharply after the U.S. imposed tariffs on Canadian steel, aluminium and automobiles, according to Reuters.
In contrast, China continued to reduce its exposure to U.S. government debt. Its Treasury holdings slipped to $682.6 billion in November, the lowest level since September 2008. While China remains the third-largest foreign holder, its holdings have fallen by more than 10% since the start of 2025, Reuters reported.Market conditions during the month were also supportive of demand for Treasuries. The benchmark 10-year U.S. Treasury yield began November at 4.107% and ended the month nearly nine basis points lower at 4.019%.
On a transactional basis, foreign investors were net buyers of Treasuries in November, with inflows of $85.6 billion following outflows of $60.1 billion in October. Earlier in the year, May recorded inflows of $147.4 billion, the largest monthly total since August 2022, according to data cited by Reuters.
Foreign appetite extended beyond bonds, with overseas investors purchasing $92.2 billion worth of U.S. equities in November, up from $60.3 billion in October. Overall, the data showed a net capital inflow of $212 billion into the United States during the month, reversing revised outflows of $22.5 billion recorded in October, Reuters reported.