Investors borrowed yen at extremely low interest rates in Japan, converted the funds into U.S. dollars, purchased U.S. Treasury securities, and profited from the difference in yields. As demand for the trade increased, the yen weakened because Japan continued supplying large volumes of its currency to the market. Japan remains the largest foreign holder of U.S. government debt, with approximately $1.14 trillion in Treasury securities. Long-Term Risks to the US Debt SystemU.S. Treasury securities have long served as one of the foundations of the global financial system. In that scenario, the supply of Treasury securities could outpace investor demand, placing severe pressure on the American financial system.