China's massive stake in U.S. Treasuries gets a lot of attention. But it's Japan, and not China, that has been busy gobbling up U.S. debt over the past year.
In fact, Japan could soon pass China as the largest foreign holder of Treasuries. China held about $1.15 trillion in U.S. bonds through August, the most recent reading available from the Treasury Department. That's little changed from the start of the year and down from 12 months ago.
Meanwhile, Japan has been steadily adding to its Treasury holdings. It now owns $1.12 trillion, up 24% from a year ago.
China had been buying Treasuries as a way to keep its currency, the yuan, pegged to the U.S. dollar. That helped lower the value of the yuan and made China's exports more competitive in markets such as the United States.