IL GIAPPONE CONTRATTACCO: fallisce l’asta da 22 miliardi di dollari mentre il Giappone respinge l…

IL GIAPPONE CONTRATTACCO: fallisce l’asta da 22 miliardi di dollari mentre il Giappone respinge l…

JAPAN FIGHTS BACK: $22B Auction Fails as Japan Rejects Trump’s Demand to Crash Its Economy!

In 2025, the U.S.—the most indebted nation globally—is pressuring allies like Japan to keep buying U.S. Treasury bonds to fund its ballooning $1 trillion annual current account deficit. But Japan is pushing back. A $22 billion 30-year Treasury auction recently flopped, with domestic demand dropping to just 14%, down from the six-month average of 17%. Foreign central banks are also backing off, with U.S. securities held for foreign institutions falling to the lowest levels since 2017, signaling a broader “de-dollarization” trend.

The dollar has weakened by 10–11% this year, undermining foreign investors’ confidence. Central banks are diversifying into gold, euros, and yuan, driven by sanctions fears and skyrocketing U.S. deficits projected to increase by over $3 trillion. Foreign buyers, who make up 30% of the U.S. Treasury market, are essential; without them, the Fed may be forced to print money, risking inflation and dollar devaluation.

Meanwhile, the U.S. is demanding that Japan raise interest rates to strengthen the yen and fix the trade imbalance. But Japan’s economy is faltering: Q1 GDP shrank by 0.7%, exports fell 0.6%, and consumer spending stagnated. Toyota lost $1.3 billion in April and May due to Trump’s 25% tariffs on Japanese cars and expects a 20% annual profit drop—over ¥1 trillion. Mazda delayed earnings forecasts citing U.S. trade instability.

Japan’s debt stands at a staggering 236% of GDP—the highest in the developed world. The Bank of Japan (BoJ) holds 80% of national bonds, with its balance sheet at 126% of GDP. Bond yields have surged, with 30-year yields hitting 3.15% and 40-year yields reaching 3.635%—the highest since 1999. Markets expect further rate hikes, partly due to U.S. pressure and upcoming Japanese fiscal stimulus.

BoJ Governor Kazuo Ueda is resisting U.S. demands, citing weak household consumption and inflation driven by essentials like fuel and food. A Reuters poll shows 68% of Japanese economists oppose immediate rate hikes.

In retaliation, Japan is boosting exports to CPTPP partners (up 17% in Q1) and strengthening ties with the UAE, Mexico, and Canada. Most notably, Finance Minister Kato hinted Japan may sell part of its $1.1 trillion in U.S. Treasuries—an act that could trigger financial chaos.

With Japan’s July 20 election looming, Prime Minister Ishiba is framing this as a fight for national interests. The long-standing U.S.–Japan alliance is at risk, and if Tokyo escalates, the consequences for global markets could be catastrophic.

#Japan #Trump #USbonds
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