According to the Treasury International capital report, China, the largest foreign holder of U.S. Treasury securities, slightly boosted its holdings by 300 million dollars from May to 1164.3 billion dollars in June.

Japan, the second largest debtor of US, also increased in its holdings. Total foreign holdings of U.S. Treasury securities rose to a new high in June, representing a sixth consecutive monthly increase. That indicates strong international demand for U.S. government debt amid the simmering eurozone debt crisis.

The strong demand of U.S. government debt is seen by many as key to funding its mounting deficit, which is forecast to surpass 1 trillion dollars for the fourth consecutive fiscal year.