According to Deep Tide TechFlow, on May 5, Japanese Finance Minister Kato Katsunobu denied claims in Milan that Japan planned to use the sale of more than $1 trillion in US Treasury bonds as a threat in trade negotiations. Previously, Kato had suggested in a television interview that Japan might use its US Treasury holdings as leverage in negotiations, triggering a brief disturbance in the global bond market.
Kato explained that his comments were in response to questions about whether Japan could assure Washington that it would not easily sell off US Treasury bonds, and emphasized that the primary purpose of holding US Treasuries is to provide the government with sufficient foreign exchange to stabilize the yen. Meanwhile, the Bank of Japan maintained the short-term interest rate at 0.5%, and Governor Ueda Kazuo stated that the timeline for achieving the 2% inflation target has been delayed due to the impact of new tariffs from the United States.