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U.S. Treasury holdings are undergoing a major reshuffle! Japan is buying 1.2 trillion, while China reduces its holdings to a 17-year low, behind which is a great power game 一起聊聊
On one side, there is rampant selling while on the other side, there is frenzied buying! By the end of 2025, the U.S. Treasury market will stage a 'divergence drama': Japan has increased its holdings for 10 consecutive months, surpassing 1.2 trillion dollars to remain in first place; China sold another 11.8 billion in October, with holdings dropping to 688.7 billion dollars, a 17-year low; Canada has dumped 56.7 billion, losing its fourth position, and the UK has also sold off significantly, falling to third place.
This choice has long transcended financial investment. Japan's counterintuitive buying seems unusual, but it is actually a 'political bundling' of the U.S.-Japan trade agreement—accepting a 15% baseline tariff while needing to increase U.S. Treasury holdings to fulfill a 550 billion dollar investment commitment. Even with its own debt ratio as high as 229.6%, it still relies on 'domestic government bond circulation' to free up funds, but the risks of a dual hit to stocks and bonds after interest rate hikes raise doubts about the sustainability of this buying.
China's continued reduction in holdings is a proactive strategic layout, increasing its gold holdings for 12 consecutive months to 74.09 million ounces, optimizing its foreign exchange reserve structure with 'de-dollarization + increasing gold' to solidify the credit foundation for the internationalization of the renminbi. Canada's selling is a direct counterattack against U.S. trade bullying, exposing cracks among allies.
Now, global 'de-dollarization' is irreversible: 95% of surveyed central banks plan to increase gold holdings, and the renminbi's cross-border payment covers 189 countries. The myth of 'risk-free' U.S. Treasuries has been shattered; this change in holdings is essentially a choice of great power paths—Japan's compromises vs. China's autonomous control.
How long can Japan, this 'buyer of last resort', withstand the pressure of 38 trillion dollars in U.S. Treasuries? Do you prefer dependency-type bundling or autonomous-type layout?
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