Macro

The most US-aligned countries cut Treasury buying by more than 60% through August, Bloomberg finds

Bloomberg counts $174.3 billion of net Treasury buying by the most US-aligned countries from January to August, the least since 2021, with Asia leading the pullback as Japan's buying all but stopped and South Korea and Taiwan sold.

By James Mitchell · Oct 28, 2026, 11:20 AM EDT

Why it matters: Buying of US debt by the most US-aligned countries is down more than 60% so far this year by Bloomberg's count, leaving more of the deficit to other investors.

For information only, not investment advice.

Being one of Washington's closest partners no longer means reliably funding the US deficit, by Bloomberg's analysis. Countries it ranks as most aligned with the US bought a net $174.3 billion of Treasuries, excluding bills, in the first eight months of 2026, based on Treasury and State Department data. That's the lowest for the period since 2021 and down more than 60% from a year earlier.

Asia led the pullback, Bloomberg found. Japan, the biggest foreign holder of Treasuries, bought just $389 million, down 99%. South Korea sold $23.8 billion, the most for the period in records going back to 1977, and Taiwan was also a net seller.

Bloomberg sees no single explanation, pointing to weak currencies, rising yields at home, demand for stocks and unease over US policy. The yen sank to its weakest level in four decades, and Bloomberg said data suggested Tokyo sold some of its Treasuries over the summer to support the currency.

"The Treasury market isn’t losing foreign buyers — it’s losing automatic buyers," said Masahiko Loo, a senior fixed-income strategist at State Street Investment Management. For your money, the question is what replaces that steady demand. "The Treasury will fund itself — the question is the price and the volatility of the price," said Shoki Omori, Deutsche Bank AG's chief fixed-income strategist for Japan.

"US-aligned" is Bloomberg's grouping, based on how often countries' votes on key United Nations resolutions match those of the US. Bloomberg itself calls alignment subjective. The figures mix official and private investors, and Treasury says its data cannot attribute holdings with complete accuracy. Foreigners still owned $7.85 trillion of Treasuries as of August, Bloomberg said.

Tags: treasury