{"id":296036,"date":"2025-05-02T16:37:24","date_gmt":"2025-05-02T16:37:24","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/05\/02\/it-could-be-among-such-cards-japan-signals-us-treasury-holdings-could-be-trade-bargaining-chip-with-donald-trump-times-of-india\/"},"modified":"2025-05-02T16:37:24","modified_gmt":"2025-05-02T16:37:24","slug":"it-could-be-among-such-cards-japan-signals-us-treasury-holdings-could-be-trade-bargaining-chip-with-donald-trump-times-of-india","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/05\/02\/it-could-be-among-such-cards-japan-signals-us-treasury-holdings-could-be-trade-bargaining-chip-with-donald-trump-times-of-india\/","title":{"rendered":"\u2018It could be among such cards\u2019: Japan signals US Treasury holdings could be trade bargaining chip with Donald Trump – Times of India"},"content":{"rendered":"
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File photo: Japan’s finance minister Katsunobu Kato (Picture credit: AP)<\/span><\/div>\n<\/section>\n<\/div><\/div>\n<\/div>\n

Japan\u2019s finance minister Katsunobu Kato<\/a> has for the first time publicly floated the possibility of using the country\u2019s vast US Treasury holdings<\/a>, worth over $1 trillion, as a potential card in ongoing trade negotiations<\/a> with Washington, reported Reuters.
In a televised interview on Friday, Kato said the primary purpose of holding such large amounts of US government debt was to ensure Japan has enough liquidity for yen intervention<\/a> if needed.
However, when asked if the holdings might be used as a bargaining chip in trade talks with the US, Kato acknowledged, \u201cWe obviously need to put all cards on the table in negotiations. It could be among such cards.\u201d He quickly added, \u201cWhether we actually use that card, however, is a different question.\u201d
Kato\u2019s remarks mark a shift from his previous stance last month when he ruled out using Japan\u2019s Treasury holdings in trade talks. The comments come after April’s global sell-off in US Treasuries, which followed US President Donald Trump\u2019s decision to impose sweeping tariffs<\/a> on trade partners, including Japan.
According to news agency Reuters, the sell-off and its market disruption may have influenced Washington\u2019s tone in bilateral talks.
While Kato declined to say whether the Treasury issue was directly discussed with US treasury secretary Scott Bessent during recent meetings, he noted that market developments \u201clikely affected Washington\u2019s approach\u201d in the dialogue.
Despite being one of Washington\u2019s closest allies, Japan’s enormous presence in the US bond market gives it strategic weight. Analysts believe Japan, which relies heavily on exports to the US, particularly in automobiles, has limited leverage outside of financial markets.
\u201cPlaying the card early, while the US bond market is in the minds of the administration after recent weeks, is a smart move,\u201d said Martin Whetton of Westpac, quoted by Reuters. \u201cThey don\u2019t have to do anything. But they can put themselves in a solid position to negotiate.\u201d
Naka Matsuzawa, chief macro strategist at Nomura, was quoted by Reuters that Japan\u2019s Treasury stockpile \u201cshould be a card if not an ace card for the negotiation,\u201d especially amid tensions over currency rates<\/a>. Though Kato said there was no discussion on specific exchange rate targets with Bessent, Tokyo has been under pressure from Trump, who accused Japan of weakening the yen to gain a trade advantage, an allegation Japan denies.
Japan\u2019s trade envoy Ryosei Akazawa also said Thursday\u2019s talks in Washington were \u201cfrank and constructive\u201d and confirmed a third round is expected in mid-May.
Speaking to reporters, he said both sides discussed tariffs, non-tariff measures, and economic security<\/a>. \u201cWe were able to advance concrete discussions,\u201d said Akazawa, according to news agency AFP.
Despite no breakthroughs yet, Japan has stressed it is “firmly defending” its interests. \u201cWe don\u2019t keep (the Treasury holdings) to support the US,\u201d Kato reiterated on TV Tokyo. \u201cWe will intervene if our country is in trouble.\u201d<\/div>\n