Key facts
- Japan anticipates intensified U.S. pressure on defense support for American troops.
- Japan expects U.S. pressure regarding its monetary policy and currency.
- President Donald Trump may seek diplomatic achievements before the U.S. midterm elections.
- Japan has been actively intervening in foreign exchange markets to support the yen.
Japan is growing increasingly concerned that the United States will escalate demands concerning host-country support for U.S. troops and monetary policy. This anticipated pressure comes as U.S. President Donald Trump may seek to secure diplomatic victories ahead of the U.S. midterm elections in November. Japan has also been actively intervening in foreign exchange markets in an effort to bolster the yen.
Recent related developments include discussions around a potential "new Plaza Accord" to address the yen's weakness, Trump's openness to talks with North Korea's Kim Jong Un, and Japan's diplomatic maneuvering amidst China's increasing pressure.