Japan has signalled that it’s willing to use what some refer to as its “nuclear option”, utilizing the fact that it’s America’s largest foreign creditor by making its $1.1 trillion worth of US Treasury holdings a bargaining tool, as per a report.Japanese Finance Minister Katsunobu Kato said “We obviously need to put all cards on the table in negotiations. It could be among such cards,” also mentioning, “Whether we actually use that card, however, is a different question,” quoted Fortune.
A $1.1 Trillion Pressure Point
Japan’s US sovereign debt holdings are huge, amounting to approximately a quarter of its own GDP, as per the report. Although the stockpile is kept for intervention in the foreign exchange market to stabilize the yen, officials now indicate that it can also be used as leverage over Washington in deterring extreme demands, according to Fortune.
If Japan were to dump even a fraction of its Treasury bonds, it would…
