NEW YORK (Reuters) – Foreign buying of Treasuries in 2019 hit their largest level in seven years, data from the U.S. Treasury Department showed on Tuesday, as Japanese and euro zone investors sought higher-yielding U.S. government debt in a world of negative interest rates.

Overall foreign inflows into U.S. Treasuries hit $6.696 trillion in December, up about $425 billion from a year earlier. That was the largest foreign inflow since 2012, data showed and analysts said.

Japanese investors bought $115 billion in U.S. Treasuries in 2019, while euro zone investors were net buyers of more than $100 billion, accounting for half of foreign buying last year.

“That’s primarily yield-driven,” said Gennadiy Goldberg, senior rates strategist, at TD Securities in New York. “Japan and the euro zone were the big buyers — two regions with negative interest rates and the need to add positive return to their portfolios.”

U.S. benchmark 10-year Treasury yields ended 2019 at 1.91% US10YT=RR.

Japan remains the largest non-U.S. holder of Treasuries at $1.154 trillion in December, and has been so since June last year.

China is the second largest foreign holder of U.S. Treasuries, with $1.069 trillion, its lowest holdings since February 2017. China’s holdings have declined for six straight months.

For 2019, China sold $54 billion in U.S. Treasuries.

Analysts said $54 billion was not a huge number, given that in 2016 China sold about $190 billion in U.S. Treasuries.

“Chinese holdings of Treasuries have been trending lower for most of the year,” said TD’s Goldberg. “Perhaps they actually need the cash domestically for intervention purpose. But China’s foreign exchange reserves have not been doing very much.”

On a monthly basis, net purchases of U.S. Treasuries hit $41.07 billion in December, the highest since August 2018, from sales of $39.597 billion in November. Prior to December’s overseas inflows, the Treasury market had seen four straight months of selling since last August.

The report also showed foreigners bought $22.15 billion in U.S. stocks in December, from purchases of $8.5 billion the previous month.

They sold $18.45 billion in U.S. corporate bonds in December after buying $10.82 billion of them in November, according to the data.

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