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Foreign Holdings of US Treasury Debt Hit Record
The Associated Press | March 15, 2012 | 09:29 AM EDT

Foreign demand for U.S. Treasury debt rose to a record high in January. China, the largest buyer of Treasury debt, increased its holdings for the first time in six months.

Total foreign holdings rose 0.9 percent in January to $5.05 trillion, the sixth consecutive monthly increase, the Treasury Department reported Thursday.

China boosted its holdings 0.7 percent to $1.16 trillion. Japan, the second-largest buyer of Treasury debt, increased its holdings 2 percent to a record $1.08 trillion.

With this purchase, Japan inches closer to being the top holder of U.S. Treasurys. China now holds $1.160 trillion while Japan holds $1.079 trillion of U.S. debt.

U.S. government debt is considered one of the safest investments. Demand for it has increased as Europe's debt problems have intensified.

The demand has remained strong despite the first-ever downgrade of the government's credit rating last August. Standard & Poor's lowered its rating on long-term Treasury debt one notch from triple-A to double-A-plus following a prolonged debate in Congress over increasing the nation's borrowing limit.

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