Tokyo has ‘many playing cards’ to play in U.S. tariff negotiations, says Japanese financial guide

Japan has “many cards” to play in tariff negotiations with the United States, in step with Takeshi Niinami, senior financial guide to Japan’s high minister.

His feedback comes forward of a three-day go back and forth by way of best negotiator Ryosei Akazawa to the U.S. for talks with U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer.

Niinami, who may be chairman and CEO of Japanese beverages producer Suntory Holdings, advised CNBC’s “Squawk Box Asia” that he’s “cautiously optimistic” concerning the industry talks.

He identified that Japan has been the largest overseas investor within the U.S. and the biggest overseas holder of U.S. Treasury bonds.

Japan must subsequently discuss extra alternatives to spend money on the United States, and can stay its large inventory of U.S. Treasurys, Niinami stated, including “We know that the President is [very concerned] over the bond market,” regarding U.S. President Donald Trump.

Japan holds about $1.1 trillion in U.S. Treasurys, and Trump stated that the bond marketplace sell-off closing week was once a part of the rationale he U-turned on his “reciprocal” price lists.

“I thought that people were jumping a little bit out of line,” Trump stated. “They have been getting slightly bit yippy, slightly bit afraid.“

Kevin Hassett, director of the U.S. National Economic Council, advised CNBC on April 10 that the bond marketplace decline contributed to Trump’s determination.

The 10-year Treasury yield from April 8 spiked above 4.5% on hypothesis a large overseas holder like Japan or China was once dumping U.S. bonds. Bond costs transfer inversely to yields, and emerging yields may imply upper U.S. loan charges.

Another transfer Tokyo may make can be to discuss army purchases from the U.S., Niinami stated, because it strives to extend protection spending to 2% of gross home product.

Japan and the U.S. have deep army members of the family, and Japan’s Self-Defense Forces use a wide selection of U.S. apparatus, together with fighter jets, helicopters and a few small hands.

“Let’s normalize the relations, because we are the biggest ally of the United States. So we want to normalize the relationship, and we want to upgrade the relationship between [the] U.S. and Japan in terms of regional security,” Niinami stated.

Japan have been hit with a 24% “reciprocal” tariff by way of Trump, even though this has been suspended for 90 days from April 9, leaving a 10% baseline tariff.

Niinami additionally stated that whilst it is not best for Japan to spend money on the U.S. given the present scenario, he stated that U.S. productiveness is far upper than different international locations, which makes the marketplace horny.

“I think we don’t like the current plan from the United States, but we want to keep investing [in] the United States,” he concluded.

— CNBC’s Alex Harring contributed to this tale.