Japanese Dumping Treasuries?

This report this morning from Bloomberg about Japanese investors dumping, or at least not buying more, U.S. Treasuries, is extremely worrisome, especially if it's followed by similar thoughts and actions by the Chinese and other big buyers.

I've been telling audiences for several years that this was inevitable if the U.S. kept flooding the market with additional debt and the value of the dollar kept depreciating.  The response typically was an Alfred E. Neuman-like "what-me-worry?" approach.  At least one person usually said that the Chinese in particular had to keep buying Treasuries because they couldn't afford for the U.S. -- their biggest customer -- not to be able to continue to buy Chinese products.

That may be true if the buyer is the Chinese government, or any fund controlled by the government.  But as this article points out, the initial decision at least may be made by private sector investors rather than governmental entities who are far less concerned with the big picture than with maximizing their own profits.

Wait, There's More: Here's Menzie Chinn's take on this over at Econbrowser.