During tense trade negotiations between the United States and Japan, former President Donald Trump made a bold demand: he wants Japan to strengthen its currency – the yen. But this move could turn out to be dangerous for both countries.
What began as a standard meeting in Washington between Japanese Minister of Economic Affairs Ryosei Akazawa, U.S. Treasury Secretary Scott Bessent, and Trade Representative Jamieson, quickly took a turn when Trump unexpectedly entered the room, insisting that currency policy be put on the table, even though the talks were originally focused on tariffs.
🔹 Accusations of Currency Manipulation – and a Swift Japanese Response
Trump previously accused Japan of deliberately weakening the yen to gain an unfair trade advantage. Now, he wants the issue of exchange rates to be at the center of negotiations.
Japanese Finance Minister Katsunobu Kato, who is set to meet Bessent next week in Washington during the IMF and World Bank spring meetings, responded firmly:
“Japan is not manipulating its currency. In fact, our most recent action was an intervention to support the yen,” Kato stated during a parliamentary session, directly rejecting Trump’s claims.
While he acknowledged the U.S. interest in discussing currency issues, he added that no specific date has been set for his meeting with Bessent.
🔹 Stronger Yen? Economists Raise the Alarm
Trump’s demand has already sparked concern among financial analysts. Many warn that forcing Japan to strengthen the yen could seriously undermine Japan’s economy – and rattle U.S. markets as well.
🔹 If the Bank of Japan were pressured into raising interest rates too quickly, it could choke off Japan’s fragile recovery and undermine the central bank’s independence.
🔹 Alternatively, if Japan started dumping U.S. dollars to push up the yen, it could destabilize U.S. bond markets — especially during a time of already heightened economic uncertainty.
🔹 Wall Street Watches Devaluation Threat
According to Citigroup, Japan may be among the first targets if Trump moves forward with a broader plan to weaken the U.S. dollar globally. Internally, some have started referring to this potential plan as the “Mar-a-Lago Accord” — a nod to the 1985 Plaza Accord, which realigned global currencies.
🔸 “Right now, we don’t see the ‘Mar-a-Lago Accord’ as an immediate risk,” wrote Citigroup FX strategist Osamu Takashima.
🔸 “But countries like Japan, which have large foreign currency reserves and undervalued currencies, would likely be in the crosshairs.”
🔹 Targeting the Yen to Shrink the Deficit
The yen has already begun to strengthen amid speculation that the U.S. may pressure Japan into a currency shift. Traders and economists believe Trump is aiming to reduce the U.S. trade deficit, and pushing Japan on the yen is one way to do it.
In March, Trump stated that he had warned both Japan and China not to continue devaluing their currencies:
“They can’t keep lowering their currency values – it’s unfair to the United States,” he said.
#TRUMP ,
#Japan ,
#USPolitics ,
#globaleconomy ,
#TrendingTopic Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“