Japan and China are still buying a lot of US debt

Japan amassed a record amount of US Treasury debt in February but still couldn't beat China. 

The latest data from the US government show China remains the largest foreign holder of US Treasury securities. Japan, which held the top spot until a few years ago, is now in the No. 2 spot. 

The Wall Street Journal explains its well:

Like most developed countries, the U.S. always runs budget deficits, meaning they constantly need investors to buy their new debt or rollover old loans to keep lights on. So, from that perspective it’s good to see Asia remain a big buyer of bonds.

Strong Asian demand for US debt is particularly good since the US saw its credit rating get dinged last year. 

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But Reuters pointed out China was buying shorter-term debt, which the news agency said could be a "sign China's willingness to extend cheap loans to the U.S. government is fading."

Combined, foreign investors now hold a record $5.1 trillion in Treasury debt. Foreign investors have been increasing their holdings of US Treasury securities for months, US government data show. 

Of course, the US Federal Reserve holds even more US Treasury debt than China or Japan. The Fed holds nearly $1.7 trillion in Treasury securities. China holds $1.18 trillion in Treasury securities. Japan in February held almost $1.1 trillion in US Treasury debt. 

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