In this article,
Japan's Finance Minister Katsunobu Kato declared that Japan's $1.13 trillion in US Treasury holdings is a "card on the table" in the escalating trade war with the US#USDT . This statement sent shockwaves through global markets, causing bond yields to spike and the dollar to wobble#Trump100Days .
A New Era of Economic Brinkmanship
Japan's warning is a response to the US's "reciprocal tariffs" and targeting of Japanese auto imports, LNG contracts, and agriculture. The country's chief negotiator, Ryosei Akazawa, had just returned from tense meetings in Washington, where US Treasury Secretary Scott Bessent clashed with the Japanese team.
Market Reaction
"This is no longer diplomacy – it's economic brinkmanship," said Nicholas Smith, Chief Strategist at CLSA. Traders are now eyeing traditional Treasury bonds and the potential impact on the crypto market, particularly the $TRUMP #trumpcoin token.
Potential Consequences
If China, which holds nearly as much US debt as Japan, joins in, it could trigger a bond market meltdown and a crypto$BNB rally driven by safe-haven demand. As trade negotiations heat up, Japan's warning signals a new era of economic tension between the US and Japan$SOL .
The Bottom Line
"We're not playing nice anymore," said Jesper Koll of Monex Group. "If you push Japan too far, they won't just retaliate – they'll set the fuse." With the next move uncertain, one thing is clear: Japan isn't backing down.
