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Biden tests the limits of America’s Asian bankers

TOKYO – The good cop-bad cop routine that Jerome Powell and Janet Yellen attempted on Tuesday is aimed at an obvious audience: America’s bankers in Asia.

The last month has been a real eye-opener for the keepers of the US dollar and the most important debt market. A disastrously weak February 25 auction of 7-year notes hinted at the demand problem investors have been fearing for more than a decade now.

A perennial question since the 2008 subprime debt crisis is whether Asian central banks will continue gorging on US debt. Even more so since 2011, when credit rating agency Standard & Poor’s yanked away Washington’s AAA rating.