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In a rare and bold statement on live TV, Japanโs Finance Minister Katsunobu Kato acknowledged the countryโs massive $1.13 trillion investment in U.S. Treasury bonds โ and hinted it could be used as leverage. When asked if Japan might use its holdings in trade negotiations, Kato replied, โIt does exist as a card.โ
This marks a major shift. Japan typically avoids even implying it could sell off U.S. debt, but rising trade tensions have pushed it to speak out. Earlier this year, the U.S. under President Trump proposed new tariffs targeting countries like Japan, creating uncertainty in global markets. Japan remained quiet at first, but Katoโs comments now send a strong warning: Japan is prepared to respond.
After tense meetings in Washington over disputes on cars, energy, and agriculture, Japan is showing it wonโt be pushed into unfair deals. Katoโs unusually direct statement signals Tokyoโs readiness to defend its interests.
Analysts say even hinting at using U.S. debt as a strategic tool could rattle Wall Street โ and it might inspire similar moves from other major U.S. debt holders like China.
With trade talks ongoing, Japan has made its position clear:
Respect our interests, or risk economic consequences.
#USJapanRelations #GlobalEconomy #TradeTensions #BondMarketPower