China’s Holdings of Treasuries Rise for First Time Since August

China’s holdings of Treasuries rose in March for the first time in seven months as the country retook the lead from Japan as the world’s largest foreign owner of U.S. government debt.

China’s ownership of Treasuries increased by $37.3 billion to $1.26 trillion, according to Treasury Department data released Friday in Washington. Japan, which had passed China in February as the biggest holder for the first time since 2008, held $1.23 trillion as of March, $2.5 billion higher than a month earlier.

The figures compare with Chinese data showing the nation’s foreign-exchange reserves declining in recent months, as the economy slowed and money left the country. Royal Bank of Scotland Group Plc estimates that China lost $300 billion in financial outflows in the six months through March.

China’s foreign-exchange reserves slid $71.5 billion in March, the seventh straight drop and the biggest since September, according to figures from the nation’s central bank. The stockpile of $3.73 trillion was the lowest level since September 2013, down from a record $3.99 trillion in June 2014.

Japan’s central bank is flooding the economy with money in a bid to end years of deflation and revive growth, resulting in a weaker yen. The nation’s holdings of Treasuries compare with $1.2 trillion in March 2014, according to U.S. figures.

The Treasury’s report, which also contains data on international capital flows, showed net foreign purchases of long-term securities of $17.6 billion in March after a revised $20.9 billion inflow in February. It showed a total cross-border outflow, including short-term securities such as Treasury bills and stock swaps, of $100.9 billion following a revised $28.8 billion inflow the prior month.

The report showed that Belgium’s holdings of Treasuries plummeted by $92.5 billion to $252.8 billion. Belgium is home to Euroclear Bank SA, a provider of securities settlements for foreign lenders, making it an indicator of global demand, David Woo, head of global rates and currencies at Bank of America Merrill Lynch, said last year.