Ray Dalio warns that increased US Treasury sales by Japan and China during Asian trading could create market surprises for dollar-denominated assets and crypto.
Macro & Markets ·
Ray Dalio has warned that increased sales of US Treasury bonds by Japan and China during Asian trading sessions could create significant market surprises for dollar-denominated assets. The two nations hold the world's largest quantities of US Treasuries, and according to analysis of the phenomenon, selling pressure has intensified during these hours on a recurring basis.
The mechanics appear consistent: each trading day begins with Treasury sales occurring during the Asian session, creating a pattern of downward pressure on prices. This pattern reflects potential shifts in reserve management or broader portfolio rebalancing by the two largest foreign holders of US government debt, with implications that extend beyond traditional bond markets to dollar-linked assets.
What remains unclear is whether this selling represents a sustained policy shift or temporary market dynamics. The duration and scale of future sales by Japan and China, as well as any coordination between the two governments, have not been detailed. Similarly, the precise threshold at which such sales might trigger broader market dislocation across crypto and other dollar-denominated instruments is not yet quantified.