Cross-Border Capital Flows
The BoJ-Fed connection and why Japan's policy choices ripple into U.S. Treasury markets
On the third Tuesday of every month, the U.S. Department of the Treasury releases the Treasury International Capital (TIC) data — the official record of cross-border capital flows in and out of U.
S. financial assets (per home.treasury.
gov/data/treasury-international-capital-tic-system). The TIC release is one of the most under-followed major macroeconomic data series, because it lacks the immediate market-moving impact of an FOMC statement or a CPI print, but it carries the structural picture of how foreign investors are allocating capital into U.S.
Treasuries, agency securities, equities, and corporate bonds. Per recent TIC monthly releases (the most recent data shown here as approximate, with substantial month-to-month variation): Japan is the largest single foreign holder of U.S.
Treasury securities at approximately $1.1 trillion (per TIC, varying by ±$50-100B across recent months); China is the second-largest at approximately $770 billion (down from a peak of approximately $1.3 trillion in 2013); the United Kingdom holds approximately $700-750 billion; Cayman Islands ~$300-400 billion (largely a domicile for offshore funds, not a sovereign holder); other major holders include Belgium (custodial holdings often associated with Russian / Eurozone official reserves), Switzerland, Luxembourg, Ireland, Brazil, India, Saudi Arabia.
That is the opening. Finishing a lesson is where it stops being interesting and starts being useful: the full lesson runs to 6 sections and ends with 6 practice questions. A free account is what opens the rest, and the other 255 lessons in the Academy with it. No card.
What this lesson covers
- 1Why Japan matters most for U.S. Treasury markets among foreign holders
- 2Cross-border capital flow accounting and the TIC data structure
- 3Major foreign holders of U.S. Treasury securities (recent TIC) — and structural context
- 4August 2024 — when BoJ policy + yen carry unwind ripples into U.S. Treasuries through cross-border channels
- 5Where to see this on the platform
- 6Summary