Who's your debt daddy? China tops list of US foreign creditors once more

Employee Linda Tarkenton holds a blank U.S. Treasury check before it's run through a printer at the U.S. Treasury printing facility in Philadelphia.
Getty Images
Employee Linda Tarkenton holds a blank U.S. Treasury check before it's run through a printer at the U.S. Treasury printing facility in Philadelphia.

China returned as the United States' largest foreign creditor in March, even as overall foreign central bank holdings of U.S. Treasuries fell, U.S. government data showed on Friday.

China held $1.261 trillion in U.S. Treasuries in March, the most since September and up from $1.224 trillion from February, the Treasury Department data showed.

Japan slipped back to No. 2 with $1.227 trillion, above $1.224 trillion in February.

Read MoreWhy Treasury yields could be topping

Belgium, which as recently as February was the No. 3 holder of U.S. debt, saw its holdings plunge in March by $92.5 billion to $252.8 billion.

Analysts have said the country's holdings had risen due to foreign accumulation of Treasuries held in custody accounts at Belgium-based clearing houses.

"This suggests that the run-up is finally starting to unwind, with Chinese holdings spiking $37.3 billion in March," Gennadiy Goldberg, interest rate strategist with TD Securities, wrote in a research note.

Why bonds are selling off: Pro
Why bonds are selling off: Pro   

The decline in overall foreign central bank holdings of Treasuries accelerated in March. They fell $23.69 billion, marking the largest monthly decline since April 2013 when they decreased by $23.78 billion.

Private investors bought $35.35 billion U.S. government debt in March, the highest amount since September.

Net buying of long-term U.S. assets totaled $17.6 billion in March from a revised inflow of $20.9 billion in February.

Including short-dated assets such as bills, overseas investors sold $100.9 billion March after a revised inflow of $28.8 billion the month before. The drop was the first in three months.

In December, net foreign sales of all U.S. assets totaled $191.5 billion.

Private overseas investors sold $90.5 billion in U.S. assets, the most since a $160.5 billion drop in December.

Official foreign sales of U.S. assets totaled 10.4 billion following combined net purchases of $39.1 billion in January and February.