Trump wants to be stronger in commercial negotiations with Japan, and this is dangerous on both sides

President Donald Trump pushes strongly for the strongest yen in commercial talks with Japan, and the request has already disturbed negotiations that were supposed to be about the customs tariff.

The meeting started on Wednesday in Washington, where Japanese Economy Minister Riusi Akazawa sat with US Treasury Secretary Scott Pessens and Trade Representative Jameson to launch bilateral discussions.

The meeting took a sharp turn when Trump went not to announce and asked to address the currency policy directly. This was followed by his general charge last month that Japan was intentionally weakening the yen to obtain an unfair advantage over American exporters.

Kato denies currency manipulation before Washington’s trip

The official agenda was already formed by the White House Trump, who insisted on setting the exchange rate processing in the foreground and the center. It was after Trump accused Tokyo of playing dirty with his currency to get an unbalanced commercial advantage.

Although Akazawa later claimed that the yen was not discussed on that day, he also said that such issues were more suitable for a different schedule – specifically, which Finance Minister Katsunobo Kato is heading next week.

Kato is scheduled to fly to Washington to attend spring meetings in the International Monetary Fund and the World Bank, where he may have a separate one with Bessent. The currency accusations were responded to Friday while speaking in Parliament, where he pushed directly to Trump’s claim that Japan intentionally weakens it.

“Japan does not manipulate the currency market to intentionally weaken the yen, as we saw the fact that our latest procedures is to conduct purchase interference in the yen,” said Kato when the legislators pressed him on Trump’s comments. He admitted the American interest in discussing exchange rates, but he said that no date for his possible meeting has been set with Bessent.

These bilateral meetings are expected to be the main forum where the United States and Japan enter the technical herbs for currency conflicts, tucked under the wider umbrella of tariff negotiations.

But mentioning Trump’s request has already started tension between financial analysts and markets. Many of them say that any forced change in the international yen balance can explode on both countries.

Some risks, they are warningBread in the fragile Japan recovery. Forcing the Bank of Japan to raise interest rates faster to enhance the yen can crush this recovery and recovery throughout the central bank independence.

Another risky decision is to throw US dollars to raise the value of the yen. But this may include Japan to spend billions of dollars from US debt markets properly when things are unstable, which creates ripple effects that the state cannot tolerate.

Wall Street watches to threaten to reduce the value of the dollar

Citigroup analyzes closely monitor the situation. Note this week, Osamu Takashima, a currency strategic expert in the bank, warned that Japan would likely be a great goal if the Trump administration tries to engineering the global dollar value.

This plan, which has been informally classified on “Mar-A-Laggo Accord”, aims to make us cheaper goods abroad.

“At this stage, we do not see” Mar-A-Lago Accord as a concrete danger, “Takashima wrote. “However, countries like Japan, which have large reserves of foreign currencies whose currency is less than its value, tends to be the goal in this case.”

The yen has already gained strength on speculation that the United States may attract Japan to the currency reorganization plan. Traders and economists believe that Trump is looking forward to reducing the massive American trade deficit, and continuing the yen is one of the ways to do so.

When Trump spoke in March, he said he warned Japan and China not to continue to reduce the value of their currencies. He said at that time: “They were unable to continue to reduce the value of their currencies, because doing this will be unfair to the United States.”

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