Group 1 - Japan's Finance Minister Katsunobu Kato stated that Japan's holdings of over $1 trillion in U.S. Treasury bonds could be used as a tool in trade negotiations with the U.S. [1] - Japan's chief trade negotiator Ryosei Akazawa reported that deep discussions took place during the second round of tariff negotiations with U.S. Treasury Secretary Scott Bessent, although no consensus was reached [1] - Kato emphasized that Japan's primary purpose for holding U.S. Treasury bonds is to ensure sufficient liquidity for potential intervention in the yen's exchange rate [1] Group 2 - Kato did not confirm whether the U.S. Treasury bonds were discussed in the recent meeting with Bessent, but he noted that the large-scale sell-off of U.S. Treasury bonds in April likely influenced Washington's negotiating stance [2] - Kato expressed concerns about market instability affecting Japan's economy and financial system, stating that excessive volatility is detrimental [2] - Kato clarified that Japan does not manipulate its currency for trade advantages, countering U.S. President Trump's accusations [2] Group 3 - The ongoing trade war initiated by the U.S. and the potential risk of economic recession have led to discussions about foreign investors reducing their holdings in U.S. dollars and Treasury bonds, which are traditionally seen as safe-haven assets [3] - Data from the U.S. Treasury indicated a 3.4% increase in foreign holdings of U.S. Treasury bonds in February, with Japan and China being the largest holders [3] - Despite Trump's imposition of a 24% tariff on Japanese products, these tariffs have been postponed until early July to allow for negotiations [3]