BLOOMBERG: Japanese Finance Minister Taro Aso said it was up to the US to resolve its debt impasse, not for Japan to fret over its investment in Treasuries, as a deadlock in Washington threatens to trigger a US default.
“This isn’t a problem that can somehow be resolved by us making a lot of noise,” Aso said in an interview on Friday in Washington with Bloomberg TV.
“There’s no other way than for the US government itself and the US Congress to make an effort to sort it out. It’s not a matter of what we should do,” Aso, 73, said when asked if Japan needed to look at its asset allocation in US Treasuries.
With the US set to run out of room to borrow more unless Congress increases the debt ceiling by October 17, Senate leaders began negotiations to avert a US default after talks between the White House and House Republicans hit an impasse.
Group of 20 (G-20) central bankers and finance ministers called for ‘urgent action’ to break the deadlock after the International Monetary Fund (IMF) warned a failure by the US to meet its debt obligations would ‘seriously damage’ the global economy.
Aso, who said last week that the Japanese government must consider the impact of a default on its bond holdings, called the US standoff a ‘big issue’ for Japan. “We hope very much it will be sorted out by October 17,” Aso said.
Japan held US$1.14 trillion worth of US Treasuries at the end of July, the second-largest foreign holder, according to data from the Treasury Department.
China, with US$1.28 trillion worth, is the largest foreign creditor to the US while the Federal Reserve holds the most Treasuries, the data show.
China is paying great attention to the US debt ceiling issue, state-run Xinhua News cited Premier Li Keqiang as saying last week. — Bloomberg