Japan & Tether: Oh, Dear!

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Honestly, darling, the Japanese are being frightfully fidgety with their American bonds! Analysts are positively in a flutter suggesting they might liquidate a rather substantial portion. One does wish people would make up their minds, don’t you think? 🙄

This little kerfuffle is causing a spot of bother in the crypto world, specifically for Tether, those charming people responsible for USDT, which, as it happens, is largely propped up by – you guessed it – US Treasuries. A depeg? The very idea!

Apparently, Japan Might Offload Bonds. How Dreadfully Inconvenient.

According to the Ministry of Finance (how frightfully official!), overseas interest in these bonds waned a teeny bit in September. A negligible dip, really, but enough to get everyone twittering.

Except, of course, Japan. They’ve been snapping them up like sweets for nine months, now holding a positively enormous $1.189 trillion. One can only assume they enjoyed the bargain. 🤷

“They bought foreign debt because Japanese bonds yielded almost nothing,” one analyst proclaimed, stating the obvious, naturally.

But, chéri, times are changing! Japanese bonds are suddenly looking a bit more… attractive. So, naturally, they might not feel quite so inclined to continue funding Uncle Sam. A distinctly rum state of affairs, wouldn’t you say?

“Japan’s long-ignored debt crisis is surfacing… a shocking spike in bond yields!” exclaims this frightfully dramatic Lena Petrova. Revolving worldwide, practically! My goodness.

Jason Burack is simply alarmed. “Japan has to sell hundreds of billions… Tether will suffer.” So dramatic. Honestly, some people.

Apparently, the spread between US and Japanese yields has narrowed. “If it approaches 2%…” shudder. Repatriation! It sounds terribly… final. Some are even predicting a $500 billion exodus. 😱

“For 30 years, Japanese yields acted as the anchor keeping global rates artificially low.” Such a poetic – and faintly terrifying – observation.

Tether and its Treasuries: A Rather Peculiar Arrangement.

The question on everyone’s lips (apart from “What’s for tea?”) is: if Japan does start selling, what on earth happens to Tether? After all, it’s rather heavily invested in the very things that might be about to wobble.

Eighty percent of Tether’s reserves, darling. Eighty! That makes them the 17th largest holder of US government debt, surpassing several entire countries. One wonders what their interior decorator thinks of all this…

It’s high liquidity and stability… usually. But a large-scale sale? Oh, the potential for chaos! 🎭

“Japan will be forced to sell US bonds, the rest of the world will follow…Bitcoin will sink!” Predicts this doomsaying market watcher. Honestly, the hyperbole!

And lest we forget, S&P Global decided to give Tether a bit of a stern look, downgrading its assessment. Apparently, a little too much exposure to “high-risk assets” and “persistent gaps in disclosure”. How very unseemly!

“Subject to credit, market, interest-rate, and foreign-exchange risks.” Goodness, the list is endless! One wants a stiff drink just reading it.

But fear not, darling! Most people remain remarkably skeptical about a collapse. The prediction market says there’s only a 0.5% chance of a depeg. Perhaps they’ve all had a particularly potent afternoon tea.

Tether has weathered storms before, and they made a hefty profit in Q3. Plus, Japan isn’t likely to unwind everything overnight. Nevertheless, one must remain vigilant. A little drama keeps life interesting, doesn’t it?

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2025-12-08 10:46