In recent days, Japan has sent a powerful yet subtle signal: it could begin selling U.S. Treasury bonds, a move that could unleash a global financial war with incalculable consequences.
Few know, but Japan is currently the largest foreign holder of U.S. debt, with over 1 trillion dollars in Treasury bonds. This position gives it strategic influence over the financial stability of the U.S. and, by extension, over the entire global financial system.
The possibility that Japan might begin to reduce its exposure to American bonds is not a direct threat, but it does represent a game changer.
Why Is This So Important?
When a player of this caliber sells Treasury bonds, three key things happen:
It increases the yield (interest) of bonds, making U.S. borrowing more expensive.
It generates downward pressure on the dollar.
Global liquidity decreases, affecting stock markets, crypto markets, and emerging economies.
The Hidden Factor: Interest Rates in Japan
Historically, Japan has maintained ultra-low rates to stimulate its economy. This has encouraged the use of carry trade, where investors borrow in yen to invest in more profitable assets in other countries.
But if the Bank of Japan raises its rates, that balance breaks:
The yen strengthens.
Less capital flows into risk assets (such as cryptocurrencies and stocks).
And a global liquidity contraction accelerates, just when markets need it most.
Are We Facing a Financial War?
Japan doesn't need to launch missiles to shake the United States. It just needs to move its bonds. This action, which was previously unthinkable, could be a response to the strengthening dollar, internal pressure to control inflation, or even a strategic repositioning in a transitioning multipolar world.
What Should You Consider as an Investor?
Prepare for high volatility.
Keep a close eye on the movements of the yen and Treasury bonds.
If you're in crypto, remember that global liquidity is key to sustaining rallies.
This situation could open unique opportunities... or mark the beginning of a new phase in the markets.
Japan Is Playing Big. The World Is Watching.
What seemed like a technical decision by the Bank of Japan could end up being a geopolitical move that impacts everything from Wall Street to Binance. The question is not whether there will be consequences, but how deep they will be.