Japan Calls Holding U.S. Treasury Bonds a 'Trump Card' in Trade Negotiations
Japan's finance minister publicly stated that the over 1 trillion U.S. dollars of American treasury bonds held by the country serve as a "card" in its trade negotiations with the Trump administration, a rare move by Japan, America's closest ally in Asia. When asked by television reporters if Japan would utilize its traditional stance of not selling U.S. bonds as a tool for trade negotiations with Washington, Kato Takayuki responded on Friday.
"It is indeed a card," Kato said, adding, "whether we use this card is another decision."
Holders including the government own 1.13 trillion U.S. dollars worth of American treasury bonds, the largest amount held by foreign entities.
There are currently no signs indicating Tokyo is considering selling official U.S. treasury bonds. However, traders noted that even referring to such actions as a "card" could amplify volatility in the U.S. bond market. Since April 2nd when Donald Trump announced comprehensive "reciprocal" tariffs on U.S. trading partners, the U.S. bond market has been experiencing significant fluctuations. U.S. treasuries were swept up in a massive sell-off of U.S. assets and only partially recovered after Trump suspended the tariffs for 90 days.
Analysts stated that Kato's remarks are a natural reaction to the economic threats posed by Trump's trade war, which Japanese Prime Minister described as a "national crisis."
Original article: https://www.toutiao.com/article/1831043620896074/
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