US: Hi Japan, can you help fight with my yield hike since I fight with China for you? I am bankrupting.
Japan: What? for me? OK....
-- People have all reasons to sell US treasuries now.
-- Fed has one reason to buy treasuries, which is for the white house.
-- There is no transitory inflation at all on our planet.
-- Fed's more purchasing of treasury is hurting Dollars.
-- Japan is not a completely independent country and happens to have lots of savings.
The exit of short side of US treasuries can not explain the decline of treasury yields last week because, unless people started to believe the coming inflation will be really temporary, we should have already seen the renewals of those contracts.
In fact, as long as the prices of goods& services rise the resulted increase in companies' margins will attract the capital to leave from bond to corporate investment. No way for this movement to slow down before the capital gets very expensive to erode the profit driven by revenue, as a result of increasing employment and wages, and by improved margin, as a result of increase in price of both sales and cost of goods sold.
Japan is the right candidate to buy more treasuries to help the WH lower interest payment, fuel equity market, and most importantly support dollars.