Japan is dumping US government bonds to prop up its currency while Canada's retaliation tariffs kick in — bad news for the dollar, US bond markets, and American exporters.

• Japan sold a large pile of US Treasuries to fund its record yen defense, choosing cash over the Bank of Japan's plan to lend against those bonds instead.
• Rising US yields are eating the value of everyone's Treasury holdings, so allies now face a "sell before it gets worse" question — and Japan just answered it.
• Energy is the trigger: Japan imports almost all its energy, oil is near $100 after a strike on a Saudi Aramco site and new Iranian threats in Hormuz, and a weak yen makes every barrel more expensive.
• China is buying crude aggressively again, front-running a shortage and pushing prices higher still.
• Canada has now matched Trump's tariffs with duties up to 50% on US steel, food, and motorcycles, and less trade means fewer dollars held north of the border.

Outlook: Expect more Japanese intervention — possibly over $100 billion of bonds sold at once — and further pressure on US bond prices if other holders follow.