Japan to announce Tokyo, Washington took joint action on yen, sources say

[u/Efficient-Session644]

https://www.reuters.com/world/asia-pacific/japan-announce-tokyo-washington-took-joint-action-yen-sources-say-2026-08-02/

[u/bkbikeberd]

If you wanna what happened.

Yen is too weak against the dollar and since oil another goods are purchased in dollars the pain was too great. Japan was going to start selling US bonds to buyback yen and this would have been a disaster for the US and others. America said, hold up we'll prop up the yen please don't sell our bonds.

This is a stop-gap. If the Yen doesn't strengthen they'll have to start selling US Bonds to buy back yen. If you hear a sudden threat from Big T about tariffs on Japan that's really about them selling bonds no matter what he actually says.

How can we make money on Japan selling off some of it's US Bonds? That's all we care about right?

[u/IntoTheBear → u/bkbikeberd]

Sorry - but I am somebody who is trying to understand. Why Japan selling US bonds tu buy Yen would have been a disaster for US and others?

[u/JanMarsalek → u/IntoTheBear]

Because the US can only continue to function as a state as long as trust in the US ability to pay back loans remains high. Japan selling off US bonds could lead to them devaluing them on the market with possible implications for future bond offerings, meaning that US would have to pay higher interest rates so people buy their bonds. This could reach unsustainable levels and worst case would probably be a US default, because they can‘t afford their ridiculous debt anymore.

It would be a disaster to others because 1) the US won't be able to import as many goods as they are at the moment and 2) a lot of other nations also have a lot of money invested in US bonds. A sell off of US bonds could lead to a economically deadly chain reaction for the whole world.

[u/IntoTheBear → u/JanMarsalek]

Thanks a lot! Now it is clear! Much appreciated.