Japan's efforts to support the yen could have implications for U.S. government borrowing, Corpay's Karl Schamotta tells WSJ in an email. Tokyo is widely expected to intervene as the yen hits a 40-year low against the dollar. Schamotta says past interventions have seen a relatively small amount of sales from Japan's large holdings of Treasurys, since a significant selloff would cause U.S. yields to spike, further strengthening the greenback. However, Japanese FX policies could seek to keep more capital at home, hampering dollar-bound flows that for years have allowed Washington to finance its own debt. The U.S. "has grown accustomed to Japanese demand for its debt," Schamotta says. "It should not assume that demand is unconditional." (paulo.trevisani@wsj.com; @ptrevisani)
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Japan's Forex Policy Could Bring Risks to U.S. Debt Financing — Market Talk
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Japan's efforts to support the yen could have implications for U.S. government borrowing, Corpay's Karl Schamotta tells WSJ in an email. Tokyo is widely expected to intervene as the yen hits a 40-year low against the dollar. Schamotta says past interventions have seen a relatively small amount of s…