China’s holdings of U.S. Treasurys fell to a 20-month low in October, as yuan appreciation indicated less of an impetus to buy the government securities.

China held $1.25 trillion in U.S. debt as of October, a $13.6 billion drop from September, the Treasury Department said in a monthly report. The nation remains the largest foreign holder, ahead of Japan, whose stockpile increased $0.6 billion to $1.22 trillion.

The yuan rose 0.4 percent against the dollar in October as the government moves toward a market-determined exchange rate. The less China intervenes to weaken its currency, the less it needs to buy securities such as Treasurys.

China has been “letting the yuan float a little more than usual,” Gennadiy Goldberg, a U.S. strategist at TD Securities USA LLC in New York, said before the report. The trend may be short-lived as China buys more Treasurys to counter the effects of a slowing economy, he said.

The yuan has weakened 1.3 percent since October.

The Treasury’s latest report, which also contains data on international capital flows, showed a net outflow of U.S. long-term securities of $1.4 billion after a record net $164.3 billion inflow in September. It showed a total cross-border inflow, including short-term securities such as Treasury bills and stock swaps, of $178.4 billion. That followed a revised $57.2 billion outflow the prior month.