WASHINGTON - THE United States is working 'closely' with China and Japan, two of the biggest holders of Treasury bonds, amid the financial crisis, Treasury Secretary Henry Paulson said on Friday.

'We are in close coordination and communication with Japan and China and other investors around the world,' Mr Paulson said at a news conference.

Mr Paulson was speaking after the finance chiefs of the Group of Seven major economies announced a five point action plan to tackle the global financial crisis following their meeting in Washington.

China holds some US$1.8 trillion (S$2.67 trillion) in foreign reserves, the world's largest, and Japan has nearly one trillion dollars in foreign reserves.

There has been speculation about what the two countries might do with their reserves, which are mostly held in dollar instruments in light of the ongoing crisis. -- AFP