Japan Seeks U.S. Tariff Exemption as Trade Tensions Lift USD/JPY

Japan has formally asked the United States for assurances that its exports will not be negatively affected by Washington’s latest tariff plans, as Tokyo works to preserve the favorable conditions secured in last year’s bilateral trade agreement. The request comes amid rising uncertainty over U.S. trade policy and potential tariff increases that could impact Japanese industries.

Japan’s Minister of Economy, Trade and Industry, Ryosei Akazawa, urged U.S. Commerce Secretary Howard Lutnick to exempt Japanese goods from a proposed 15% blanket tariff during talks on Friday. Tokyo is concerned that the new measures could undermine the preferential treatment it negotiated in the 2025 U.S.–Japan trade deal.

The market reaction to the renewed trade tensions was visible in currency trading. The USD/JPY pair climbed to around 157.80 by 16:58 ET (21:58 GMT), reflecting investor caution as trade uncertainty grows. Meanwhile, Japan’s Nikkei 225 index staged a late-session recovery, closing at 55,620.84, up 0.62% on the day. Despite the rebound, the benchmark index still recorded a weekly loss of more than 5%.

Japan’s appeal follows a volatile period for U.S. trade policy. In February, the U.S. Supreme Court struck down several tariffs previously introduced by President Donald Trump. In response, the administration quickly rolled out a new 10% baseline tariff, with the possibility of increasing it to 15%. Analysts warn that the new measures could “stack” on top of existing duties, potentially reversing key concessions achieved in the recent trade agreement.

Under the 2025 deal, Japan secured a tariff ceiling of 15% on automobile exports to the United States, significantly lower than the earlier 27.5% rate. In return, Tokyo committed to a massive $550 billion investment in U.S. infrastructure and energy projects. Akazawa emphasized that Japan expects the terms of the agreement to remain intact and warned that additional tariffs would increase costs for one of Japan’s most critical export sectors.

Despite the tension over tariffs, both sides reaffirmed their ongoing economic cooperation. Officials discussed the progress of Japan’s investment pledge, including plans for a second phase focusing on critical minerals, energy security, and large-scale infrastructure development.

Reports indicate that a major nuclear power project involving U.S.-based Westinghouse is being considered as part of the next investment round. The first phase of the investment package, worth approximately $36 billion, included projects tied to offshore drilling and natural gas production.

The recent talks between Akazawa and Lutnick are seen as groundwork for Japanese Prime Minister Sanae Takaichi’s upcoming visit to Washington on March 19. While the U.S. Commerce Department confirmed the discussions on social media, it did not mention Japan’s request for tariff exemptions, leaving uncertainty about Washington’s next move on trade policy.