Japan Made Tough Decision Against US: Japan Ditches US Treasury Bonds! Even China Didn’t Expect This
In this video, we examine the startling news that China and Japan—two of the largest holders of U.S. Treasuries—have reportedly sold off around 45% of their American bond holdings. We explore whether this simultaneous move suggests a coordinated East Asian strategy or simply parallel decisions driven by domestic economic needs. The discussion also dives into the potential impact on U.S. interest rates, the dollar’s global position, and the broader geopolitical landscape.
Topics:
Origins of the Sell-Off
Why China and Japan began reducing their U.S. Treasury portfolios.
China’s Diversification Strategy
Beijing’s push for financial independence amid trade tensions.
Japan’s Domestic Pressures
Tokyo’s monetary policies, low growth, and high public debt.
Potential Coordination
Analysis of whether this is truly an “East Asian alliance” or separate policy actions.
Effects on U.S. Markets
How a major bond sell-off could raise yields, deepen deficits, and disrupt Federal Reserve policy.
Chapters:
00:00 Introduction: The Surprising Sale of U.S. Treasuries
02:10 China’s Strategy: Over-Reliance & Diversification
05:20 Japan’s Motivations: Domestic Debt & Monetary Easing
08:00 45% Sell-Off: Coordinated or Coincidence?
11:10 Impact on U.S. Treasury Markets & Federal Reserve
13:30 The East Asian Alliance Debate
15:55 Global Economic & Political Repercussions
18:10 Conclusion & Future Outlook
00:00 – Introduction: The Surprising Sale of U.S. Treasuries
We kick off by discussing the recent revelations that China and Japan have significantly trimmed their U.S. Treasury holdings—an eye-opening move that raises questions about global financial stability.
02:10 – China’s Strategy: Over-Reliance & Diversification
Learn how Beijing’s trade tensions with Washington led it to reduce its exposure to U.S. debt and focus on alternative assets like gold, the euro, and other currencies.
05:20 – Japan’s Motivations: Domestic Debt & Monetary Easing
Discover why Tokyo, a longstanding ally of the United States, might also feel compelled to cut its American bond holdings amid low growth, high public debt, and shifting monetary policy.
08:00 – 45% Sell-Off: Coordinated or Coincidence?
Is this a deliberate move by the two East Asian powers to pressure the U.S., or just separate decisions driven by individual circumstances? We examine both possibilities.
11:10 – Impact on U.S. Treasury Markets & Federal Reserve
Dive into the mechanics of how a major foreign sell-off can push bond yields up, strain the federal budget, and force the Fed to consider changes in interest rates.
13:30 – The East Asian Alliance Debate
Could China and Japan realistically unite to “shake” the U.S. economy? We weigh their historical rivalries against today’s multipolar financial realities.
15:55 – Global Economic & Political Repercussions
From the potential weakening of the dollar’s reserve status to greater geopolitical tension, we explore how these divestments might reshape international markets.
18:10 – Conclusion & Future Outlook
We wrap up by discussing possible scenarios—from continued sell-offs and diplomatic backchannels to market self-correction—and how Washington may respond to safeguard its economic backbone
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38 Comments
Donald Trump is literally threatening NATO allies and refusing to come to their aid whilst simultaneously cosying up to dictators like Putin and the Kim dynasty. All while making policy decisions that economists have warned repeatedly for years would destabilize our economy. Hmmm… I wonder why any attentive country wouldn't want to remain financially invested in the US? 🤔
So Trump and his MAGA followers chant "America First." But what they're going to get is America Alone. When everyone leaves the room and you're the only one left, you are not First, you are Alone.
Wait until Xi decides F these American guys and their sanctions, let's screw them royally by dumping trillion of their bonds on the market. I bet if Trumpette baby doesn't even know how tarrifs work, he has no idea what bonds US bonds are lol it was checkmate before he even moved his first piece on the board. America will not be first to fall, but it sure is gonna be first to make a lot of pig noise going down
With all these comments it looks like I'm watching a game of Civilization or something. What's really crazy is everything can change overnight in the international market. Buckle up, buttercup! We're going for a ride!
We really should call in China's debt to the U.S.
It may have been worth noting that the greater amount of U.S. debt is still held domestically, by the Federal Reserve, private investors, citizens holding bonds, banks, etc. The amount of debt held by foreign powers, while having risen in recent years, remains in the ballpark of 20% of the total U.S. debt. Not mentioning this at any point in the video, showing that while the amounts are still extremely large most of those amounts are held domestically, provokes a sense that the narrative has bias. Or is indulging in a gross amounts of speculation. The video is more than a little fear mongering, though the issues presented are real even if not as dire as suggested. On a much more mundane and slightly pedantic topic, the edits in the video are not clean with some questionable short exposure images in the process of the cut. Editing is not really on par with the rest of the production quality that seems to be the goal.
Turns out, calling an ally national security threat during lame duck and not reversing that in the new administration doesn’t sit well with that ally, surprise.
Selling off U.S. Bonds does not affect the U.S. Treasury in any way. The Treasury does not have to buy back the bonds until the maturity date. It is when foreign countries stop BUYING newly issued U.S. Bonds, that the Treasury is affected. Then the U.S. has to increase the coupon rate (interest rate) on newly issued bonds in order to find new buyers.
"You have no honour" ahh move
Why trust anything from a Country being run by shitler? Unstable brain…. Unstable economy
Trump turning all his allies against the USA. The USA will stand alone at this rate.
My opinions: I think you've given a great analysis; I fully agree mostly. But you failed to mention very significant points. To them (J & C) Trump is a fool, a massive threat to American's dollar's value; perhaps failing on purpose… So they are interested in dumping dollars ASAP. Furthermore, many other countries could become fearful of DonOld's stupidity & dump their dollar holdings too. That could trigger a massive economic recession in America. The trade sanctions, by Trump, could also trigger a massive economic recession….. So Japan & China may be getting out, of the dollar market, for good reasons. Canada too. Europe too. Now others selling dollars at a loss could become useful for America over time, BUT not for the medium nor short time period.
Reminder that it was tge tariffs, ban 8f foreign import and increased taxation of foreign goods, that eventually pushed Japan on a warpath back in the early 20th century. While an outright war is unlikely this day and age, US just might shoot itself in a foot with these new foreign policies and general lack of co-operation with Asian and European countries.
JAPAN – CANADA
BRICs on the rise while the dollar falls, thanks to a particularly unqualified pants shitting felon.
Everybody Hates Trump's Arogance So All Americans Will Suffer 😭
We're Being Isolated From World Markets 🌎
Production in the US that is a funny joke im from the Midwest
This was inevitable.
Such extreme trade deficits and they’re gonna spend 400 billion US on tax breaks. Yeah I think selling is the safe bet
I hope that the rest of the world stops allowing America to fix resources in dollars, this is causing an artificial demand for the dollar, because Gold, Oil, Platinum is set in dollars, it results in the trading of these different resource in dollars, which creates this artificial demand.
Makes more sense that it is a diversification, spread the risk, since America borrow 3 trillion American dollars from China and then invested it in China to profit from their low labour cost, they screwed themselves doubly, by China expanding it's own industry and cornering the EV market, they empowered China with their investment and at the same time when they tried to take their profits and capital out. China devalued their currency, meaning that America owed more to China because their debt was fixed in dollars. By strengthening the Chinese currency, this works in the favour of American investments in China increasing their value.
America needs to sell of much of it's military assets, enter the EU, expand EU investment in defence, this digs America out of a hole and at the same time, they push these loss making equipments onto the EU.
Japan will never co-operate with China, the two countries and people hate each other. Selling bonds together would not have any upside to Japan, because an over supply on the market would decrease the sales price.
It could be Japan is selling off bonds to fund it's expanding military?
Musk and the paypal gang want to collaps the dollar and put in their bitcoin system. They want the US to collaps into small digital fiefdoms! Iy sound wild, but they have been saying this since Yarvin published his manifesto in 2012.
People need to start dumping the dollar. Its gonna come down fast.
If they sold the bonds doesnt that mean somebody brought them?
Filling the video by repeating the same information is LAME. Better to say it once and have a shorter video! You lost me at 11:30.
USD isn’t the only reserve currency. China was approved years ago too.
Plus Brics is so successful, g7 almost don’t matter.
Can't blame them! Trump's effed up our reputation bigtime.
I mean considering Elon's been caught editing our books changing 8 mil to 8 bil… It makes sense
USA is no longer a friend of the free world and democracy. It’s on the side of authoritarian dictatorships. Never thought I’d see the country I was raised in and loved dearly turn into this nightmare, but it has fallen so badly. I’m moving abroad shortly and this too I never imagined I would leave my country. Very sad and disturbing turn of events.
Nobody wins a trade war, inflation rises, demand then production falls and recession inevitably follows. But with the US implementing a mountain of tariffs and red tape that will impact tens of thousands of products and billions of individual transactions within its borders, it will be harder hit than most countries. So it makes sense to ditch US bonds before the economy stalls and shrinks.
That this action further destabilises and weakens the American economy is merely the unfortunate outcome of a logical decision to cope with an erratic and unstable situation.
The chip manufacturing equipment from Europe that the USA band from China should be tariffed to the USA. That should give the USA some food for thought..they need the rest of the western world and so do we. This tarrif foolishness must be stopped
There's going to be a run on the dollar
Trump leadership is erratic and apparently unaccountable, and basic laws appear to be trampled on, which makes the US look very unreliable. The Trump/Elon partnership is plainly a dangerous, self serving circus too. Swift removal of Trump and the ridiculous MAGA team is Americas only hope.
Trump Trump he’s our man if he can’t destroy us no one can!