This is the truth of how Japan "blew up" Trump with US Treasury bonds? Someone compared it to a new era "Pearl Harbor".

The other day, as Trump's tariff war began, a large amount of US Treasury bonds were sold off, causing the long-term yield of US Treasuries to see its largest increase since 2020. According to Reuters, market personnel said that this sell-off wave was caused by Japanese hedge funds, and Japanese financial analysts also believed that this possibility was very high, even triggering a response from senior executives of the Liberal Democratic Party of Japan. Recently, a manager at an investment company on Wall Street posted a tweet that seemed to reveal the "truth" behind Japan's "blow-up" of US Treasury bonds.

It is reported that after Trump took office, local banks in Japan such as Norinchukin Bank purchased a large number of US Treasury bonds. In order to boost yields, the bank repeatedly used these bonds as collateral for loans, increasing leverage, resulting in a leverage ratio of 60 times for these bonds. The risks involved are beyond words. If anything goes wrong, the bank would immediately collapse.

Following that, as everyone knows, after Trump announced the tariff war, US Treasury bonds fluctuated violently. The quantitative fund of this bank went bankrupt instantly. This also led to Japanese financial institutions quickly selling off US Treasury bonds, causing the issuance interest rate of US Treasuries to rise by more than 20 basis points overnight. Each basis point requires the US to add approximately $3.6 billion in interest for newly issued government bonds, which could be enough to "blow up" the US economy instantly. This made Trump call a halt.

The investment banker at this Wall Street firm said: "We pay tribute to this Japanese hedge fund. With a leverage ratio of 60 times on 10-year US Treasury bonds, you have saved the world from a great depression. We will not forget your sacrifice..." However, this incident has not been officially acknowledged by either the US or Japanese authorities. It is only circulating among financial professionals, with some comparing it to a "new era Pearl Harbor". Japan's "bold gamble" has once again harmed the US severely.

Original article: https://www.toutiao.com/article/1829431114579012/

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