Japan’s treasury sell-off signals the next phase of global market turmoil

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Japan just did what everyone knew was coming. They offloaded US Treasuries to keep the yen from spiraling. It was inevitable. The interest rate gap between Japan and the US made the yen untradeable, and Tokyo had no choice but to act. But this is only the beginning. The real crisis starts when they run out of Treasuries to sell.

Kato, Japan’s finance minister, confirmed they are coordinating with the US, trying to avoid “excessive moves” in the forex markets. That is just diplomatic talk for delaying the inevitable. Once Japan and Europe burn through their Treasury reserves, the bond market collapses, yields plunge, and the dollar surges. At that point, the game is over.

This is not just about Japan. Every major economy is caught in the same trap. The fiat system is breaking down, and Japan is the first to hit the wall. Their massive debt, near-zero interest rates, and endless intervention have created a ticking time bomb. When the carry trade finally unwinds, it will not be a temporary event. This will be the reversal of decades of financial engineering.

The Bank of Japan has kept its economy on life support for years, but the effects are wearing off. Selling Treasuries is just a bandage. The real wound is deep—structural, systemic, and beyond repair. The reverse carry trade is here, and once it fully unwinds, the ripple effects will spread through every major market.