Katsunobu Kato dared to say out loud what everyone else whispers quietly. During an interview with TV Tokyo on Friday, May 2, the Japanese finance minister acknowledged that he might use the US debt held by Japan as a negotiating tool against Donald Trump. "It is a card that exists, but the decision to use it or not is another matter." The statement startled financial circles: Here was the US's best Asian ally threatening to use a formidable weapon against the United States.

Currently, Japan is the largest foreign holder of US Treasury bonds, with $1.125 trillion (€1,000 billion). This represents just under 4% of the total US debt, yet it is significant enough to cause a shockwave if Japan were to sell these securities en masse. Such a maneuver would cause a sharp increase in US interest rates, making it more expensive for the United States to finance its deficit.

Demonstrating the sensitivity of the issue, two days after his statement, Kato backtracked: "We are not considering selling US Treasury bonds as part of the Japan-US negotiations." However, the matter is far from closed. Since the announcement of "reciprocal" tariffs by Trump in early April, a rumor has been circulating in the markets: Asians, led by the Chinese, have allegedly sold part of their US Treasury bonds as a countermeasure to the White House's announcements.

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