According to data released by the US Treasury Department on Thursday, overseas investors continued to increase their US Treasury holdings in July, with total holdings rising to $9.16 trillion, up $31.9 billion from June and reaching a historic high. Despite China's significant reduction in holdings, stronger increases from the UK and France drove overall growth.

The bulk of July's overseas investment increase came from the UK, which as the second-largest foreign holder of US Treasuries, saw its holdings surge by $41.3 billion to $899.3 billion, setting a new record. France also recorded substantial growth.

Trading data revealed that both private sector and official institutional investors became net buyers of US Treasuries and bills during the month. Private investors primarily focused on medium- to long-term Treasuries while showing net selling in short-term Treasury bills, whereas official institutions were net buyers across all maturities.

However, China, the third-largest foreign holder of US debt, dramatically reduced its holdings by $25.7 billion to $730.7 billion in July, marking the lowest level since 2009. Japan, the largest overseas holder, made a modest increase of $3.8 billion, bringing total holdings to $1.15 trillion.

Notably, Canada experienced a substantial decrease of $57.1 billion, dropping to $381.4 billion and reaching its lowest level since April this year.

Overseas investor demand for US Treasuries has drawn significant attention recently amid President Trump's substantial tariff increases on global imports, raising concerns about international capital flows. Currently, overseas funds and governments collectively hold more than 30% of outstanding US Treasury securities.

Some private sector indicators suggest that overseas investment interest in US assets may be weakening. The Bloomberg US Treasury Index declined in July, ending the previous month's gains, indicating falling Treasury prices during the month, with some holding changes also affected by valuation fluctuations.

Analysts believe that with expanding US fiscal deficits and escalating trade tensions, uncertainty remains over whether overseas investors will continue to increase their Treasury holdings in the future.