In April, the US Treasury market experienced significant turmoil, with data revealing that Japanese private institutions, including banks and pension funds, sold over $20 billion (around TWD 650 billion) in overseas long-term bonds in the first two weeks of the month. This sell-off has become a key factor in the declining prices of US Treasury bonds.

While Japan's Finance Minister, Katsunobu Kato, emphasized that Japan would not weaponize US Treasuries as a negotiation tool, he could not prevent private sell-offs. Analysts have warned that this wave of selling may just be beginning, as large insurance companies and institutional investors like GPIF adjust their investment positions. This will likely lead to a surge of funds returning to Japan from dollar assets.

Recently, the yen surged past the critical psychological level of 140 to 1 USD, having risen approximately 6% this month. Experts speculate that during the US-Japan trade negotiations, the US may desire a yen appreciation to 100 against the dollar, while a more realistic level could be around 120, indicating potential further appreciation of nearly 20% for the yen.