Japan eclipsed China as the largest holder of US bonds in February, the Treasury Department reported Wednesday, the first time that has happened since August 2008.

Japan edged ahead of China even as both countries reduced their holdings of Treasury securities from January. But China took a bigger cut.

Japan ended February with $1,224.4 billion in US government debt, while China, excluding Hong Kong, held $1,223.7 billion.

Trailing far behind in third place were Caribbean banking centers with $350.6 billion, followed by Belgium at $345.3 billion.

US government borrowing has declined sharply with a shrinking budget deficit over the past three years, after expanding rapidly to support the economy in the Great Recession.

The federal deficit fell to $483 billion in 2014, its lowest level in six years and below 3.0 percent of economic output for the first time since 2007.

In February, the balance of US capital flows remained in the red but was lower than in January, according to the Treasury International Capital data report.

Overall net foreign sales of long-term securities in February were estimated at $10.6 billion, well below the $67.3 billion in January.