Recent speculation that China and Japan were dumping U.S. Treasuries took a hit on Wednesday after a report from the U.S Treasury Department showed that foreign holdings of Treasuries actually rose 3.4% in February.

Both China and Japan increased their holdings in the month.

Japan remained the largest holder and increased its holdings by 4% to $1.1259 trillion.  China raised its holdings by 3% to $784.3 billion.  China remained the second-largest foreign holder.

In all, foreign holdings of U.S. treasuries stood at $8.8172 trillion at the end of February.

Rumors that China or Japan was dumping treasuries kicked into high gear in April, after President Trump’s larger-than-expected reciprocal tariffs were enacted, so they could still prove true. However, today’s new data shows that both countries were increasing their U.S. debt exposure going into the tariffs.

China has retaliated against the U.S. reciprocal tariffs, while Japan has not.

The U.S has a 125% reciprocal tariff on China in addition to the 20% tariff to address the fentanyl crisis.  If you included section 301 tariffs on specific goods from China, tariffs reach as high as 245% on imports from the country.

Japan currently faces a 24% reciprocal tariff from the U.S. and will be one of the first countries with which the Trump administration will engage in trade talks.

Trump revealed that Japan is coming today to negotiate tariffs, and the President will attend the meeting.

“Japan is coming in today to negotiate Tariffs, the cost of military support, and “TRADE FAIRNESS.” I will attend the meeting, along with Treasury & Commerce Secretaries,” Trump said on Truth Social. “Hopefully something can be worked out which is good (GREAT!) for Japan and the USA!”

The data could indicate that the Asian countries want to show goodwill toward the U.S. and President Trump ahead of potential tariff negotiations by raising their treasury holdings rather than decreasing them.