(Bloomberg) —China’s holdings of U.S. Treasuries rose for a third straight month in April, reaching the highest in half a year amid signs the economy is stabilizing.

Chinese ownership of U.S. government bonds, notes and bills increased by $4.6 billion to $1.09 trillion in April, remaining the second-largest foreign holder of American debt, according to a monthly Treasury Department report released on Thursday. Japan, the largest non-U.S. holder, decreased its total to $1.11 trillion, down $12.4 billion from a month earlier.

Things are starting to look up in China following several years of persistent capital flight and soft economic performance. The manufacturing sector is growing again, factory prices are reflating, and capital outflows have shown signs of abating. All that has helped to stabilize the yuan and enabled the People’s Bank of China to accumulate reserves.

After bottoming in January, the nation’s reserves rose $55 billion to $3.05 trillion in May, contributing to a $34 billion increase in China’s Treasury holdings this year.

Foreign-exchange reserves at central banks tend to rise when the nation runs a current account surplus by selling more goods than it buys internationally. Dollars also pile up when authorities sell the local currency against the greenback to prevent it from appreciating too fast, like China did to slow the rise of the yuan for the better part of the last decade, resulting in its burgeoning coffers.

China is prepared to increase its holdings of Treasuries under the right circumstances, as officials judge the assets are becoming more attractive than other sovereign debt and the yuan stabilizes, people familiar with the matter said last week. The yuan has climbed more than 2 percent against the dollar this year, after plunging 6.5 percent in 2016 in its biggest decline in more than two decades.

Belgium’s ownership of Treasuries, often seen as a home to China’s custodial accounts, fell in April to $96.4 billion.

Total foreign ownership of U.S. Treasuries amounted to about $6.07 trillion in April, down by $28.6 billion from the previous month. The report, which also contains data on international capital flows, showed a total cross-border inflow, including short-term securities such as Treasury bills and stock swaps, of $65.8 billion.

To contact the reporters on this story: Andrew Mayeda in Washington at amayeda@bloomberg.net ;Andrea Wong in New York at awong268@bloomberg.net To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net Randall Woods, Robin Ganguly