Japanese Finance Minister Katsunobu Kato said on Friday that Japan’s vast holdings of U.S. Treasury securities — exceeding $1 trillion — could be considered a strategic asset in trade negotiations with Washington. The statement signals that Tokyo is willing to explore a wider set of options as it prepares for economic discussions with the United States.

Kato emphasized that the primary purpose of Japan’s holdings in U.S. debt is to ensure sufficient liquidity for potential interventions in the yen market. “Even though the main purpose is to make sure we have enough liquidity to carry out yen intervention when needed, Tokyo needs to put all cards on the table in negotiations,” he stated.

The idea of leveraging Japan’s status as one of the largest foreign holders of U.S. Treasuries adds a new dimension to future trade diplomacy between the two nations. While Kato acknowledged the potential role of these holdings, he also noted that deploying them in negotiations is not a given. “It could be among such cards. Whether we actually use that card, however, is a different question,” he said.

Japan’s readiness to invoke its financial position as part of trade dialogue comes amid shifting global trade dynamics and renewed focus on bilateral ties. The remarks suggest a more assertive posture from Tokyo in safeguarding its economic interests while maintaining flexibility in its approach.

As Japan and the United States continue to shape their trade agenda, the mention of U.S. debt holdings as a negotiation lever underscores the complex interdependence of their financial and economic relations. Any movement on this front would likely be watched closely by global markets and policymakers alike.