The Treasury Department said Thursday that total foreign holdings declined to $5.6 trillion in June, a drop of 1 percent from May. Total foreign holdings fell 0.9 percent in May and 0.3 percent in April after hitting an all-time high of $5.7 trillion in March.
China, the largest foreign buyer of Treasury debt, trimmed its holdings by 1.7 percent in June to $1.28 trillion. Japan, the second largest foreign purchaser, cut its holdings by 1.8 percent to $1.08 trillion.
Treasury debt held by foreigners is up 5.4 percent from a year ago. That suggests global demand remains high despite the prolonged battles in Washington over budget deficits.