Scott Bessent, former hedge fund manager at Soros Fund Management, now U.S. Treasury Secretary, led the first joint currency intervention with Japan since 2011 to support the yen. Japan holds $1.1 trillion in U.S. Treasury bonds, making it the largest foreign creditor to the United States whose national debt approaches $40 trillion, exceeding 100% of GDP. This intervention aimed to prevent Japan from selling its U.S. holdings to buy yen, which would have further raised U.S. interest rates, with the 30-year Treasury yield hitting its highest level since 2007. While China has halved its U.S. Treasury holdings to approximately $693 billion, Japan’s alliance with the United States and export-driven economy maintain Tokyo as the largest foreign holder of American debt.
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