Japan Confirms Forex Excluded from US Trade Deal, Eases Yen Pressure Concerns

Japanese Finance Minister Katsunobu Kato announced that the recent bilateral trade agreement between Japan and the United States does not include any provisions or discussions related to foreign exchange (forex) rates. The confirmation, reported by Kyodo News on Wednesday, comes amid growing speculation over possible U.S. pressure on Japan to influence the yen’s value in trade negotiations.

Speaking to reporters at Japan’s Ministry of Finance, Kato emphasized that currency matters had been treated separately from the broader trade talks. This clarification may help reduce market concerns that Japan could be forced into currency policy adjustments as part of its economic dealings with Washington.

The speculation had been partly driven by former President Donald Trump’s historical criticism of Japan’s monetary strategy. He had accused Japan of deliberately weakening the yen to give its exports a competitive edge, a stance that has resurfaced in U.S. policy discussions under the current administration.

Kato noted that while currency discussions had occurred, they were held directly with U.S. Treasury Secretary Scott Bessent and were not part of the formal trade deal structure. This separation signals Japan’s intent to protect its monetary policy autonomy, especially in light of the yen’s current fluctuations and global market sensitivity.

The exclusion of forex topics from the trade agreement suggests a strategic approach by both nations to avoid politically sensitive issues that could derail progress on tariffs and trade reform. It also indicates Tokyo’s ongoing efforts to reassure both domestic and international stakeholders of its independent monetary policy stance.

Source: Reuters