The carry trade hides a lot of US debt, too. Why would the US only care about the US debt held sovereignly by Japan and not by the banks and hedgefunds executing the carry trade?

If the US is not trying to defend the US dollar, why'd they use Euros and not USD to prop up the Yen, and also why surprise everybody doing so?

And, if it is better for the US if Japan normalized rates, then why did the US buy yen at all? According to you, just telling Japan to raise rates would be better, right?

The carry trade does not hide public US debt. The US Treasury is concerned about Japan because it’s like the first or second largest holder of Treasuries in the world.

> If the US is not trying to defend the US dollar, why'd they use Euros and not USD to prop up the Yen

Because that was the legal facility open to them. They used a foreign currency reserve that they had the ability to trade.

> And, if it is better for the US if Japan normalized rates, then why did the US buy yen at all? According to you, just telling Japan to raise rates would be better, right?

Yes. Go re-read my comment: Japanese politicians do not want rates to go up. It’s like a cornerstone of current LDP policy.