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Japan has just sent a clear message to the U.S.: Don't push us too far

Japan has finally dropped the mask. In a rare and bold move, Finance Minister Katsunobu Kato went live on national television and drew out a weapon that the U.S. is all too familiar with — Japan's massive $1.13 trillion U.S. Treasury bond holdings.

When asked whether Japan would ever use its position as the largest foreign creditor of the U.S. as leverage in trade negotiations with the Trump administration, Kato remained unflinching.

"It really exists as a card," he said calmly — but the impact was anything but calm. That one statement sent shockwaves through the financial markets.

This is not a passing remark. Japan has always remained silent even about the idea of selling U.S. debt. But with Trump unleashing threats of "reciprocal tariffs" since April, Tokyo is clearly no longer playing nice.

The first tariff threat shook Wall Street. Bond yields soared, a strong sell-off occurred, and a wave of anxiety spread across the markets. Trump then temporarily postponed the tariff levels for 90 days — but the damage was done.

A warning from Japan: We will not back down

Kato's shock came just hours after Japan's top trade negotiator, Ryosei Akazawa, returned from tense meetings in Washington with U.S. Treasury Secretary Scott Bessent. Behind closed doors, the situation was not pretty — both sides reportedly clashed .....continued...