Part 5/9:
Japan holds over $1 trillion of US Treasuries, making it the largest foreign holder of US debt. A sudden sell-off of Japanese bonds or a currency crisis could ripple across global markets, potentially destabilizing US markets due to interconnected debt holdings. In the US, the national debt stands at a hefty $38 trillion, but relative to its economy, it remains more sustainable than Japan’s debt level—about 1.2 times GDP compared to Japan’s 2.4 times. This suggests that, despite the risks, the US is currently in a somewhat better fiscal position.