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“It
does exist as a card, but I think whether we choose to use it or
not would be a separate decision,” Kato said during a news show
on national broadcaster TV Tokyo.
Kato did not elaborate and he did not say Japan would step up
sales of its holdings of U.S. government bonds as part of its
talks over President Donald Trump's tariffs on exports from
Japan.
Earlier, Japanese officials including Kato had ruled out such an
option.
Japan is the largest foreign holder of U.S. government debt, at
$1.13 trillion as of late February. China, also at odds with the
Trump administration over trade and tariffs, is the second
largest foreign investor in Treasurys.
Kato stressed that various factors would be on the negotiating
table with Trump, implying that a promise not to sell Treasurys
could help coax Washington into an agreement favorable for
Japan.
Trump has disrupted decades of American trade policies,
including with key security allies like Japan, by i mposing big
import taxes, or tariffs, on a wide range of products.
A team of Japanese officials was in Washington this week for
talks on the tariffs.
The U.S. is due to soon begin imposing a 25% tariff on imported
vehicles and auto parts, as well as an overall 10% baseline
tariff. The bigger tariffs will hurt at a time when Japanese
economic growth is weakening.
Asian holdings of Treasurys have remained relatively steady in
recent years, according to the most recent figures.
But some analysts worry China or other governments could
liquidate their U.S. Treasury holdings as trade tensions
escalate.
U.S. government bonds are traditionally viewed as a safe
financial asset, and recent spikes in yields of those bonds have
raised worries that they might be losing that status due to
Trump’s tariff policies.
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