Bessent, who once reprimanded Japan's finance minister, has erupted again during the U.S.-Japan finance ministers' meeting!
Lately, U.S. Treasury Secretary Bessent has taken a hardline stance against both the UK and Japan. Following the early-year collapse of Japan's bond market, which shook U.S. Treasuries, he harshly pressured Japan’s Finance Minister Takeo Hiranuma to stabilize the market. Just ahead of Trump’s visit to China, Bessent made an emergency trip to Japan for the third time, focusing on issues including yen intervention, monetary policy, and U.S. Treasury stability. Over the past week, Japan has spent over $60 billion to defend the yen and sold U.S. bonds to prop up its currency, severely disrupting the U.S. Treasury market. In response, Washington is pressuring Japan to raise interest rates instead of resorting to administrative intervention. This latest visit serves not only to soothe allies and manage financial risks in Asia, but also reflects America’s strategic balancing act in the Asia-Pacific amid Sino-U.S. rivalry. Caught between reliance on the U.S. and the pursuit of independent fiscal policy, Japan finds itself in a dilemma.
[Clever] Comment briefly: The current state of U.S.-Japan finance starkly exposes the unequal reality among allies. Previously, Japan held massive amounts of U.S. Treasuries and long exerted influence over global bond markets. Now, with the yen plunging and Japan spending hundreds of billions within a week to intervene in foreign exchange markets, it is being tightly controlled by the United States. By selling U.S. bonds to stabilize the exchange rate, Japan directly raises U.S. borrowing costs—touching upon core American interests—no wonder Bessent has taken such an aggressive stance. With Middle East tensions escalating and high-level U.S.-China talks approaching, America must simultaneously maintain stability in the U.S. Treasury market while enlisting Japan as a counterweight in the Asia-Pacific region—caught between two pressing demands, struggling to balance both. Once a global economic powerhouse, Japan now appears reduced to a mere pawn in U.S. monetary policy. Unable to withstand domestic debt burdens through rate hikes, yet blocked by U.S. opposition when attempting currency interventions, Japan is trapped. There is no true mutual benefit in great power dependency. Japan’s entangled predicament reveals clearly to the world: financial independence and industrial self-reliance are the real foundations for any nation to withstand external pressures.
Original source: toutiao.com/article/1864895583196295/
Disclaimer: The views expressed in this article are solely those of the author.