Citigroup said that with the reduction in short-term US debt holdings, Japan does not need to sell more than $1.1 trillion in US Treasury assets and still has other tools to support the yen exchange rate. Citi strategists led by Jason Williams wrote in the research report that the Japanese authorities can use foreign and international monetary authorities' repurchase tools set up by the Federal Reserve. This tool allows overseas central banks to use their US bonds as collateral to obtain US dollar liquidity without selling bonds to raise funds. Citi pointed out that Japan can also use 160 billion US dollars of deposits held in overseas central banks, or use euro assets to buy yen. The Williams team said in the report: “These deposits have never been withdrawn, so we consider this amount to be a pure emergency reserve. Taken together, we judge that there are currently no significant risks in interchange spreads.”

Citigroup said that as the size of short-term US debt holdings shrinks, Japan does not need to sell more than 1.1 trillion US Treasury assets and still has other tools to support the yen exchange rate. Citi strategists led by Jason Williams wrote in the research report that the Japanese authorities can use foreign and international monetary authorities' repurchase tools set up by the Federal Reserve. This tool allows overseas central banks to use their US bonds as collateral to obtain US dollar liquidity without having to sell bonds to raise funds. Citi pointed out that Japan can also use 160 billion US dollars of deposits held in overseas central banks, or use euro assets to buy yen. The Williams team said in the report: “These deposits have never been withdrawn, so we consider this amount to be a pure emergency reserve. Taken together, we judge that there are currently no significant risks in interchange spreads.”