Japan aims to use US bonds to negotiate trade

Japan's finance minister believes Japan's large holding of US Treasuries could be a bargaining chip in trade negotiations with the US after the 24% tariff was delayed until July, but it still faces a 10% general tariff and a 25% tariff on automobiles, its main export.

Katsunobu Kato, Japanese Finance Minister Japan's large holdings of US Treasuries could be a bargaining chip in trade talks with the United States, Kato said in a TV interview as senior Japanese and US officials met in Washington for a second round of trade talks, but Kato said whether the bonds would actually be used as a bargaining chip was another matter.

Japan still faces a 24% tariff imposed under Trump's policies, which Japan strongly opposes. Although the 24% tariff has been delayed until at least July, Japan still faces a 10% general tariff and a 25% tariff on automobiles, Japan's main export to the US.

Kato said Japan's main purpose in holding more than $1 trillion in U.S. Treasuries, the world's largest, was to provide sufficient liquidity for market intervention to support the yen.

Japan needs to show all the cards it has in the negotiations, and US bonds may be one of them, but whether it will actually use them is another matter.

Kato's remarks marked a sharp change from last month, when he rejected the idea of ​​using US Treasuries in trade negotiations.

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