No U.S. push for Japan to prop up yen in tariff talks #JapanFinance

U.S. Treasury Secretary Scott Bessent on Thursday did not push his Japanese counterpart for support to prop up the yen during their first face-to-face talks, officials said, as the two countries seek common ground over President Donald Trump’s sweeping tariffs intended to reduce trade deficits and protect domestic industries.

After the meeting in Washington, Japanese Finance Minister Katsunobu Kato said they confirmed the Group of Seven countries’ longtime agreement that exchange rates should be set by markets and excessive currency volatility would hurt economic and financial stability.

Kato told a press conference that they discussed currency issues but “there was absolutely no” reference by Bessent to pursuing specific exchange rate levels or a framework to control currency movements.

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

He said they agreed to continue discussing currency issues “closely and constructively.”

Their meeting, which lasted about 50 minutes, took place after Japan and the United States formally launched negotiations last week in the wake of higher import tariffs imposed by Trump to address 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-oriented 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.

The Japanese minister said he told Bessent that Trump’s tariffs were “extremely regrettable” and urged Washington to review its sharp increase of protectionist measures, which the International Monetary Fund warned this week could lead to a “significant slowdown” of world economic growth.

Trump and his administration officials have not just focused on trade issues in the ongoing talks with Japan, also urging Tokyo to cover more of the costs of hosting U.S. troops.

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

The Trump administration’s new 24 percent tariffs on goods imported from Japan are paused until early July under a 90-day reprieve of 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.

U.S. Treasury Secretary Scott Bessent (L) and Japanese Finance Minister Katsunobu Kato shake hands in Washington on April 24, 2025. (Photo courtesy of the Japanese Finance Ministry)(Kyodo)

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 IMF 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, Japan’s 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 the security arrangements of the two allies at once.

Ishiba told a parliamentary session earlier this week 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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