Japan's Finance Minister Katsunobu Kato suggested that Japan's substantial holdings of U.S. Treasurys, valued at $1.13 trillion, might be utilized as leverage during tariff negotiations with the Trump administration. While he acknowledged the potential of these assets as a negotiation tool, Kato remained non-committal about actively using this leverage, emphasizing that a decision to sell or retain these bonds would depend on broader negotiation dynamics. The discussions come as Japan faces the imposition of significant tariffs on its exports, impacting its economic outlook amid existing trade tensions.
Kato did not elaborate and he did not say Japan would step up sales of its holdings of U.S. government bonds as part of its talks over President Donald Trump's tariffs on exports from Japan.
Kato stressed that various factors would be on the negotiating table with Trump, implying that a promise not to sell Treasurys could help coax Washington into an agreement favorable for Japan.
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