US Says It Is Not Pursuing Currency Targets in Trade Talks with Japan
Investing.com – US Treasury Secretary Scott Bessent has officially stated that Washington is not pursuing any specific currency targets in bilateral trade talks with Japan. The statement was made just ahead of a scheduled meeting with Japanese Finance Minister Katsunobu Kato later this week.
USD/JPY exchange rate – a sensitive issue on the negotiating table
According to Secretary Bessent, the dollar-yen exchange rate will be one of the key topics at the upcoming meeting. In addition, the negotiations are expected to cover many key issues such as:
Tariffs on imports and exports between the two countries.
Non-tariff barriers.
Monetary policy and the possibility of exchange rate manipulation.
Government subsidies related to labor and fixed capital investment.
While the exchange rate is expected to be discussed, Bessent made it clear that the US is “not targeting currency” in the talks.
Japan seeks tariff concessions
The bilateral trade talks were initiated by Japan last week, with the aim of negotiating tariff concessions – particularly those related to the auto industry, a key export sector of the Japanese economy.
The two sides have agreed to have their finance leaders work together on the complex issue of exchange rates, fueling speculation about what exactly will be discussed in the first meeting between Bessent and Kato. The talks are expected to take place on the sidelines of the International Monetary Fund (IMF) and World Bank spring meetings in Washington.
US Tariffs – A Threat to Japan’s Economy
The Trump administration had previously imposed a 24% tariff on Japanese exports to the US, although most of that was temporarily suspended until early July. The 10% tariff remains in place, along with a 25% tariff on autos – a major blow to Japan’s key industry.
Analysts warn that maintaining the high tariffs could have a significant negative impact on the export-dependent Japanese economy.
The Outlook
While trade tensions remain, the US’s failure to pursue a specific currency target could help ease some of the pressure on the Japanese yen, which has been volatile in recent times. However, tariff and subsidy issues remain major hurdles to be resolved in upcoming negotiations.
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