Core Insights - Despite concerns over the weakening dollar affecting confidence in U.S. assets, foreign demand for U.S. Treasury securities remains robust, leading to a record total holding of $9.13 trillion in June, an increase of $80.2 billion from May [1][6] - In the first half of the year, the total foreign holdings of U.S. Treasuries increased by $508.1 billion [1] Summary by Category Foreign Holdings - As of June, foreign investors held a record $9.13 trillion in U.S. Treasuries, marking an increase of $80.2 billion from May [1] - Major foreign holders include Japan, which increased its holdings by $12.6 billion to $1.15 trillion, and the UK, which saw a significant increase of $48.7 billion to $858.1 billion, surpassing China as the second-largest holder [6] - China's holdings remained stable, with a slight increase of $0.1 billion to $756.4 billion, making it the third-largest holder [6] Market Dynamics - The influx of funds into U.S. Treasuries occurred during a period of significant dollar depreciation, with the dollar index dropping nearly 11% in the first half of the year, the largest semi-annual decline since 1973 [1][6] - The demand for U.S. Treasuries is crucial as foreign investors hold over 30% of outstanding U.S. debt, serving as a vital pillar for U.S. government financing [5] Investment Behavior - The actions of major foreign holders showed divergence in June, with the UK and Belgium increasing their holdings, while countries like India and Ireland opted to reduce their positions [6] - India's holdings decreased by $7.9 billion to $227.4 billion, while Ireland also recorded a decline [6] - Changes in total foreign holdings reflect not only net buying or selling but also fluctuations in asset valuations, as evidenced by a rebound in a U.S. Treasury index in June following a sell-off in May [6]