Japanese Finance Minister Katsunobu Kato has clarified Japan's position regarding its vast holdings of United States Treasury securities, stating that the country has no intention of using them as leverage in ongoing trade negotiations with Washington. Speaking to reporters in Milan, Kato emphasized that his previous remarks were misinterpreted and were not intended as a threat.

"My comments were made in response to a question whether Japan could, as a bargaining tool in trade negotiations, explicitly reassure Washington it wouldn't sell its Treasury holdings easily," Kato explained. "The comments weren't meant to suggest selling Treasury holdings," he added.

Japan currently holds over $1 trillion in U.S. Treasury bonds, making it one of the largest foreign holders of American debt. Concerns had been raised after Kato previously stated that the Treasury holdings could be "among the cards" available in trade discussions. However, he also noted at the time that "whether we actually use that card, however, is a different question."

The clarification aims to ease financial market concerns and affirm Japan’s commitment to maintaining economic stability and strong financial ties with the United States. Kato’s comments come as President Donald Trump's administration continues to negotiate trade terms with key allies in Asia, seeking to balance trade deficits and address tariff-related issues.

Analysts noted that any action involving the sale of U.S. Treasury securities by a major holder like Japan could have significant global market implications. Kato’s assurance reaffirms Japan’s role as a stable and cooperative economic partner amid ongoing bilateral trade talks.