In a significant escalation of the trade war, Japan's Finance Minister Katsunobu Kato has declared that the country's $1.13 trillion in US Treasury holdings is now a "card on the table." This move comes amid rising tensions between the US and Japan over trade policies, including $TRUMP administration push for "reciprocal tariffs" and targeting Japanese auto imports.
*Key Points:*
- Japan's massive US Treasury holdings could be used as leverage in trade negotiations
- The move has sparked concern among investors and analysts, with some warning of a potential bond market meltdown
- The crypto market, particularly $TRUMP tokens, may also be affected by the escalating trade tensions
*Market Reaction:*
The declaration has led to a spike in bond yields, a wobble in the dollar, and a scramble among crypto traders. Analysts warn that if China, which holds nearly as much US debt as Japan, decides to show its hand, it could trigger a market crisis.
*Expert Insights:*
- "This is no longer diplomacy — it’s economic brinkmanship," said Nicholas Smith, Chief Strategist at CLSA.
- "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."
The situation remains volatile, with all eyes on the next move in the trade negotiations.
