WASHINGTON (AP) — Foreign demand for U.S. Treasury securities rose to a record level in July and China increased its holdings after two months of declines.
The Treasury Department says total foreign holdings rose 0.7 percent in July to a record $5.35 trillion.
China, the largest foreign holder of Treasury debt, boosted its holdings to $1.15 trillion, up 0.2 percent from June. Japan, the second-largest buyer of Treasury debt, increased its holdings 0.6 percent to $1.12 trillion.
Demand for U.S. debt is rising in part because investors are worried about Europe's debt crisis and its impact on the global economy.
U.S. government debt is considered one of the world's safest investments. Moody's, however, has warned it could lower America's top credit rating if Congress fails to reach a budget deal later this year.