U.S. not setting currency targets in trade talks with Japan

Investing.com -- The U.S. Treasury Secretary, Scott Bessent, clarified on Wednesday that the U.S. does not have specific currency targets for the ongoing bilateral trade talks with Japan. This statement comes ahead of an anticipated meeting with Japanese Finance Minister Katsunobu Kato later this week.

The dollar-yen exchange rate is expected to be a significant topic during this meeting. The U.S. is considering various factors in its negotiations with Japan, including tariffs, non-tariff trade barriers, currency manipulation, and government subsidies for labor and fixed capital investment, according to Bessent.

The Treasury Secretary also expressed his expectation for Japan to honor the G7 agreement. When asked about potential currency targets for the bilateral trade negotiations, Bessent simply stated, "No currency targets."

Japan initiated bilateral trade talks with the U.S. last week, aiming to negotiate concessions on tariffs, especially those affecting the automobile industry, a key sector in Japan’s export-driven economy.

Both countries have agreed that their finance chiefs will address the complex issue of currency rates. This agreement has sparked speculation about the topics Bessent and Kato will discuss in their first in-person meeting, likely to occur during the International Monetary Fund and World Bank spring meetings in Washington.

President Trump has imposed a 24% tariff on Japanese exports to the U.S., although most of these tariffs have been suspended until early July. A universal 10% rate remains in effect, along with a 25% duty on cars. Analysts suggest that these tariffs could significantly impact Japan’s economy.

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