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Japanese Finance Minister Kato Katsunobu has said US government bond holdings could be one of the country’s bargaining chips in tariff negotiations with Washington.
Kato made the comment on a TV Tokyo business news broadcast on Friday.
He noted that there is a view among market players that plunges in US stocks, the dollar and Treasury bonds are what prompted US President Donald Trump to announce a 90-day halt to what he calls reciprocal tariffs.
Asked whether declaring that Japan will not easily sell its US debt holdings can be a negotiating tactic, Kato replied that it can.
He also said it’s a matter of course to place all the country’s cards on the negotiation table.
But he added that whether to use them or not is a different matter.
Kato also said Japan holds Treasury bonds to ensure liquidity in case it needs to intervene in the market, rather than to support the US government.
US Treasury Department data show Japan is the largest foreign holder of US Treasuries. The country owned around 1.08 trillion dollars’ worth as of January 2025.
China is the second largest owner, with holdings worth about 760 billion dollars. The UK has about 740 billion dollars in US government debt as the No. 3 holder.
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