Scott Bessent sees good progress with Japan and South Korea in trade negotiations

US Treasury Secretary Scott Bessent said early talks with Japan and South Korea this week were “productive,” according to Reuters on Friday.

After meeting with Japanese Finance Minister Katsunobu Kato in Washington, Bessent said he “welcomed the strong start” between the two countries as they opened new bilateral trade talks. The discussions focused on finding ways to boost trade between the allies, without new restrictions getting in the way.

On Thursday, Bessent also met with South Korean Finance Minister Choi Sang-mok, South Korean Trade Minister Ahn Duk-geun, and US Trade Representative Jamieson Greer.

The Treasury said the group agreed to “further productive discussions, including on currency policy,” and made it clear that both sides want to push trade forward instead of putting up barriers. Bessent said he appreciated South Korea’s “fast and positive engagement” on tariff issues.

Currency and tariff issues stay hot in Washington meetings

Thursday’s talks also made it obvious that currency policy is going to stay a hot topic. Even though Japan avoided direct US pressure to boost the yen for now, officials said exchange rates and the Bank of Japan’s interest rate moves are going to be major issues in the bigger trade negotiations.

After sitting down with Bessent for about 50 minutes, Katsunobu Kato told reporters that they didn’t talk about setting exchange-rate targets or creating any kind of system to control the yen.

“There was no discussion on exchange-rate targets,” Kato said when asked about currency issues. A Japanese Finance Ministry official also confirmed that the US made no accusations that Japan was purposely weakening the yen.

When reporters pressed for more, Kato stayed tight-lipped. Asked if the US made any direct demands, he said, “I can’t comment because that goes straight into actual discussions.” The meeting took place during the International Monetary Fund and World Bank spring meetings in Washington.

Yen discussions still on the table in Japanese talks

Still, there were clear signs that money talk isn’t going away. Kato said that Japan and the US would “continue close and constructive dialogue on exchange rates” as part of the ongoing bilateral trade negotiations. Analysts took that as a hint that Washington might push for changes in the future to help US businesses.

Next week, top Japanese trade negotiator Ryosei Akazawa will head to Washington for the second round of talks. Things are expected to get rougher. President Donald Trump, who is back in the White House, has been loud about cutting the US trade deficit.

His past claims that Japan keeps the yen weak on purpose have raised market expectations that Tokyo could be forced to let the yen rise, giving US exporters a better shot at beating foreign competitors.

The meetings this week might have been calm on the surface, but the road ahead looks anything but smooth. With Trump’s team locked in on shrinking the trade gap, and old accusations still fresh, Japan could be facing real pressure to give ground in the talks.

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