The US Treasury doubled the ceiling on its bond buyback operations from $2 billion to at least $4 billion per operation, targeting securities in the 10- to 30-year maturity range. This expansion aims to improve liquidity in segments where trading has become thin and volatile, particularly on 20-year bonds reintroduced in 2020. Japan, the largest foreign holder of US debt with approximately $1.2 trillion in Treasuries, represents a potential risk if its investors reduce positions to stabilize the yen. The program remains modest compared to roughly $27 trillion in outstanding marketable Treasury debt. The initial yield decline followed by a rebound suggests market participants do not view these buybacks as a structural solution to long-term rate trajectory.
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