US rules out setting currency targets in trade talks with Japan
By David Lawder and Leika Kihara
WASHINGTON (Reuters) -The U.S. does not have specific currency targets in mind as part of bilateral trade talks with Japan, Treasury Secretary Scott Bessent said on Wednesday, ahead of an expected meeting with Japanese Finance Minister Katsunobu Kato this week.
The dollar-yen exchange rate is likely to be among the key topics discussed at that meeting.
Bessent said the U.S. was looking at multiple factors including "tariffs, non-tariff trade barriers, currency manipulation and government subsidy of labor and fixed capital investment" in its negotiations with Japan.
"We’d expect the Japanese to honor the G7 agreement," he told reporters on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington.
"No currency targets," Bessent said when asked whether the U.S. will discuss any currency targets with Japan as part of the bilateral trade negotiations.
Japan last week kicked off bilateral trade talks with the U.S. to seek concessions on tariffs, including on automobiles, a mainstay of the Asian nation’s export-heavy economy.
The two countries have agreed to have their finance chiefs take up the thorny currency rates issue. That move has raised speculation as to what Bessent and Kato could discuss in their first face-to-face talks, which are expected to be held on the sidelines of the IMF and World Bank meetings.
U.S. President Donald Trump’s focus on addressing a huge trade deficit and his past remarks criticizing Japan for intentionally maintaining a weak yen have led to market expectations that Tokyo will face pressure to strengthen the yen’s value against the dollar and give U.S. manufacturers a competitive advantage.
Those expectations have fueled the yen’s recent rise to seven-month highs against the dollar.
But sources have told Reuters that Japan sees little scope for direct action such as currency intervention or an immediate interest rate hike by its central bank.
Trump has hit Japan with 24% tariffs on its exports to the U.S. although, like most of his levies, they have been paused until early July. A 10% universal rate remains in place, as does a 25% duty on cars, which analysts say will deal a heavy blow to Japan’s economy.
