Yen Swings Shake US Markets as Japan's Holdings Become Key Variable

The yen's movements are having a significant impact on both US Treasuries and stocks. Japan is the largest foreign holder of US Treasuries, holding around $1.1167 trillion as of late June 2026.

This large amount of Japanese investment in US Treasuries makes it a crucial factor in influencing Treasury demand and long-term US yields.

The US Treasury Secretary, Scott Bessent, has been sensitive to moves in the yen, suggesting that policy coordination with Japan's foreign-exchange authorities may be possible.

If the yen weakens excessively, Japanese authorities could sell US Treasuries held in foreign-exchange reserves to defend the currency. This would send Treasury prices lower and yields higher.