Japan, U.S. finance chiefs discuss currency as part of tariff talks #JapanFinance

The finance chiefs of Japan and the United States held a meeting Thursday in which they discussed currency policy as the two countries seek some common ground over U.S. President Donald Trump’s sweeping tariffs.

Shortly after his discussion with U.S. Treasury Secretary Scott Bessent in Washington, Japanese Finance Minister Katsunobu Kato said both sides agreed that foreign exchange rates should be decided by market players and that volatile currency moves can cause harm to the economy.

Kato said at a press conference that Bessent made no reference to currency levels or targets.

The Japanese minister said he also told Bessent that Trump’s tariffs are “extremely regrettable” and urged Washington to review them.

Bank of Japan Governor Kazuo Ueda (L) and Japanese Finance Minister Katsunobu Kato attend a press conference in Washington on April 24, 2025. (Kyodo)

Their meeting was part of the negotiations formally launched last week between Japan and the United States in the wake of Trump’s imposition of higher tariffs on imports in his bid to rectify what he sees as unfair trade practices by other countries.

Among major trading partners, the Trump administration has prioritized tariff negotiations with Japan, a key U.S. security ally with an export-driven economy. During the first round of the negotiations, the two countries did not touch on currency issues, agreeing to leave them for the finance ministers.

Trump and his administration officials have not just focused on trade issues. As for the ongoing talks with Japan, they have also urged Tokyo to pay more to host U.S. troops.

On the trade front, Trump has especially called into question what his officials see as Japan’s nontariff barriers, while claiming that Tokyo has devalued the yen to place Japanese carmakers and other manufacturers at an advantage.

Japanese officials have dismissed the assertion as untrue, adhering to the position that exchange rates should move stably based on economic fundamentals.

Contrary to the claim, Japan has also conducted yen-buying, dollar-selling interventions in recent years to arrest what it characterized as excessive, speculative currency moves.

On Wednesday, Bessent told a group of selected reporters that the United States has “absolutely no currency targets” in its trade negotiations with Japan.

The Trump administration’s new 24 percent tariffs on goods imported from Japan are paused until early July under a 90-day reprieve on its so-called reciprocal duties also targeting dozens of other countries.

Only about 13 hours after the country-specific, higher-band tariffs took effect on April 9, Trump instituted the pause for all countries except China to allow for negotiations.

But Japan, along with many other trading partners, continues to face an additional duty of 25 percent on car imports and other sector-based tariffs, as well as a universal levy of 10 percent.

The meeting between Kato and Bessent, held on the sidelines of the semiannual gatherings of the International Monetary Fund and World Bank Group, followed last week’s visit to Washington by Japan’s chief negotiator in the tariff talks.

On April 16, Ryosei Akazawa, minister in charge of economic revitalization, met with Trump in the Oval Office for 50 minutes before taking part in a meeting with Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.

Akazawa is set to visit the United States again next week for another round of negotiations, with the hope of eliminating the additional tariffs on automobiles, a key Japanese industry, and some other products, according to sources familiar with the plan.

Japan has made it clear that it has no intention to discuss tariff issues concurrently with other subjects, with Prime Minister Shigeru Ishiba saying over the weekend that he does not think it would be appropriate to deal with both trade and security arrangements of the two allies at once.

Earlier this week, Ishiba also told a parliamentary session that what matters for Japan is the substance, rather than the speed, of any agreement in its negotiations with the United States.

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