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Citigroup: Japan has other ways to support yen
Citigroup's analyses confirm that Japan has alternative options to support the yen, as it does not need to sell its holdings of U.S. Treasury bonds worth over $1.1 trillion. Japan can benefit from the repurchase agreement (repo) mechanism with the Federal Reserve, which allows central banks to pledge Treasury securities to obtain dollar liquidity without selling assets. Additionally, Japan can rely on its foreign bank deposits, which amount to approximately $160 billion, or use euro-denominated assets to buy yen in the foreign exchange market. These tools serve as emergency financial reserves without significant risks related to price spreads.
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