Foreign demand for U.S. Treasury securities rose to a record level in December, evidence that overseas investors remained confident in U.S. debt despite on-going budget battles in Washington.

The Treasury Department said Friday that foreign holdings of U.S. Treasurys rose 0.3 percent in December from November to $5.56 trillion. It was the 12th consecutive monthly gain.

China, the top foreign holder, increased its holdings 1.7 percent to $1.2 trillion. Japan, the second largest holder, boosted its investment 0.2 percent to $1.12 trillion.

Demand kept rising in December even as Congress approached a deadline to raise the government's $16.4 trillion borrowing limit. In January, Congress approved a measure to temporarily suspend the borrowing limit until May 19. That has allowed the government to take on more debt while the debate continues.

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