Japan warns US not to rig currency talks, Ishiba demands fairness

Japan told the United States on Sunday that any attempt to rig the upcoming currency discussions will be called out.

Prime Minister Shigeru Ishiba said live on NHK that his country will push for “fairness” in every single part of the exchange rate talks, as President Trump continues his tariff campaign against America’s biggest trade partners. 

The warning came just days after Trump unexpectedly walked into the first round of US-Japan trade negotiations and said there was “big progress.” What he really wants is for Tokyo to stop what he claims is a deliberate weakening of the yen to help Japanese exporters.

Ishiba made clear that currency policy is going to be handled directly by Finance Minister Katsunobu Kato and Treasury Secretary Scott Bessent, not the leaders.

But he was very direct when asked if Japan would help push the yen higher. “We’ll have to deal with this issue from the standpoint of fairness,” Scott said, though he didn’t say how exactly Japan would respond.

Ishiba points to energy deals, auto rules, and debt as trade pressure builds

As is well documented, the Trump White House has hit Japan with 24% tariffs on goods entering the US, but those have been put on hold until early July. A 10% baseline tariff still applies, and 25% duties on cars are active—hurting one of Japan’s most important exports.

Even so, Ishiba said Tokyo might be open to changes on non-tariff barriers, including the long-running complaints about Japan’s auto safety standards. These rules, Washington says, make it nearly impossible for American-made cars to enter the Japanese market.

Ishiba didn’t agree with the accusations, but he didn’t deny the possibility of change either. “There are differences in US and Japanese traffic and safety rules that must be taken into account,” he said. “But we also need to ensure we’re not told our (safety) rules are unfair.”

His comment follows a report by Nikkei Asia that Japan is considering loosening some of these auto safety requirements as part of its negotiation strategy.

Other negotiation pieces are on the table

There’s also the question of US energy exports. Ishiba said Japan could increase imports of American liquefied natural gas, but only if Washington proves it can deliver it without issues.

“As for liquefied natural gas, Australia is the biggest exporter to Japan. I believe the US is in fourth place. It’s possible we could have this increase. The question is whether the US can deliver (energy) stably,” he said.

Then there’s Japan’s US Treasury holdings—over $1 trillion, the biggest in the world. Some economists think Japan could use that as a pressure point in the talks. But Katsunobu already ruled that out earlier this month, and Ishiba repeated the position.

“This is something that’s based on trust between the two sides, global economic stability, as well the two countries’ economic stability,” he said when asked if Japan would use that leverage.

Katsunobu is flying to Washington this week to join the G20 finance chiefs’ meeting, which will run alongside the IMF spring summit. Everyone expects him to sit down with Scott to go head-to-head on all the issues—currency, tariffs, energy, and auto rules.

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