Japan overtook China as the top foreign holder of US government debt for the first time since the financial crisis of 2008, a sign of economic and policy shifts in Asia's two largest economies.

Japan's ownership of Treasuries fell by $14.2 billion to $1.2244 trillion in February, according to Treasury Department data released on Wednesday in Washington. China's holdings were $1.2237 trillion as of February, $15.4 billion lower than a month earlier.

Japan's holdings of Treasuries increased $13.6 billion from a year earlier, while China's declined $49.2 billion.

The reversal reflects the diverging paths of the two countries' currencies, with Japan embarking on record asset purchases that have weakened the yen 27 percent since 2012, and China seeking to avoid having the yuan decline too much against the dollar as the nation's economy slows. China's Treasury holdings had overtaken Japan's in 2008 as the U.S. ramped up borrowing during the financial crisis.

"With the weakness in the currency and the potential outflows, there's less need or opportunity for the Chinese to accumulate dollar reserves," Win Thin, the global head of emerging-market strategy at Brown Brothers Harriman & Co in New York, said before the Treasury report.

China's foreign-exchange reserves slid the most on record in the past three months, data from the nation showed Tuesday, fueling speculation the central bank sold holdings to support the yuan as money flowed out. The reserves dropped $113 billion to $3.73 trillion, the third straight quarterly decline.