The Finance Minister of Japan Katsunobu Kato said on Wednesday that the commercial negotiations to be held with the United States can include discussions on exchange rates.
“There have been several communications, including the United States exchange rates, therefore the currency movements can be among the topics to be discussed. But the details have not yet been defined,” Kato said to the Japanese parliament.
Kato also said that any discussion on exchange rates will be held among the financial leaders of both countries.
Although not confirmed, Kato should visit Washington this month, when the financial leaders of the G20 are on the sidelines of the meetings of the International Monetary Fund (IMF). The journey opens the possibility to Kato to keep his first face face with the US Treasury Secretary Scott Bessent.
Given the focus of the President of the United States Donald Trump in dealing with the enormous American commercial deficit, some analysts say that Japan could face Washington’s pressure to help reverse the low trend of Iene, which offers its exports a competitive advantage.
“The possibility of an introduction of measures to guide Hyenas is not small”, since Trump could encourage dollar reduction to revitalize US producers, Mizuho Securities analysts wrote in a note.
“The weakened measures of the dollar and the strengthening of the Yen will focus on the currency intervention of the purchase of Yen by the Japanese authorities and on the continuous increase in the interest rate by the Japanese bank,” they said.
This year, the Yen increased by over 7% compared to the dollar, after dropping by about 10% in 2024.
The Japanese Prime Minister Shigero Ishiba and the President of the United States Donald Trump have agreed to start bilateral tariff discussions on a Monday call.
Although the Minister of Economy Ryosi Akazawa has been appointed Japanese commercial negotiator, Kato is likely to play a key role in negotiations while his ministry supervises the country’s currency policy.
Trump designated the commercial representative of Beesent and American Jamieson Greer to guide commercial negotiations with Japan.
“Japan remains one of the allies closest to the United States and I can’t wait for our next productive commitment for rates, non -tariff commercial barriers, currency problems and government subsidies,” Bessent said in an X post on Tuesday.
The United States are the largest destination of Japan exports, with about 28% of the total consisting of automotive shipments.
Source: Terra
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