Japan denies using its $1 trillion U.S. Treasury Holdings as a bargaining chip in trade negotiations.

According to ChainCatcher news, Japan’s Finance Minister Kato Katsunobu denied reports by Reuters in Milan that Japan plans to use the sale of over $1 trillion in U.S. Treasury bonds as a threat in trade negotiations. Two days earlier, Kato hinted in a television interview that Japan might use its U.S. Treasury Holdings as a bargaining chip, causing a brief stir in the global bond market. Kato explained that his previous remarks were in response to a question about whether Japan could give Washington assurances that it would not sell US bonds lightly, and stressed that the main purpose of holding US Treasury bonds is to provide the government with enough foreign exchange to stabilize the yen if necessary. Meanwhile, the Bank of Japan left short-term interest rates unchanged at 0.5%, and Governor Kazuo Ueda said that the timeline for achieving the 2% inflation target has been delayed due to new US tariffs.