Japan says no plan to threaten Treasuries sale in US trade talks
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Japanese Finance Minister Katsunobu Kato during an interview at the Finance Ministry in Tokyo.
PHOTO: REUTERS
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TOKYO – Japan has no plans to threaten to sell its US$1 trillion-plus (S$1.3 trillion) holdings of US Treasuries in trade talks with Washington, Japanese Finance Minister Katsunobu Kato said on May 4, clarifying earlier remarks that the bond holdings could be used as a bargaining chip.
“My comments were made in response to a question whether Japan could, as a bargaining tool in trade negotiations, explicitly reassure Washington it wouldn’t sell its Treasury holdings easily,” Mr Kato said.
“The comments weren’t meant to suggest selling Treasury holdings,” he told a press conference in Milan.
In a TV interview on May 2, he said Japan’s US Treasury holdings could be used as a card in trade negotiations, raising explicitly for the first time its leverage as a massive creditor to the US.
Mr Kato, in the interview, added that whether Japan actually uses that card is a different question.
At the press conference on May 4, he repeated that the primary purpose of Japan’s US Treasury holdings – the largest in the world – is to ensure it has sufficient liquidity to conduct yen intervention when necessary.
“This has been our stance, and we don’t plan to use sale of US Treasury holdings as a bargaining tool in the negotiations.” REUTERS
