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Economy

US-Japan trade talks to include currency manipulation rules

Tokyo's strong opposition could make it a touchy subject at G-20 meeting in Fukuoka

U.S. Treasury Secretary Steven Mnuchin, left, speaks with Japan's Finance Minister Taro Aso at the World Bank/IMF Spring Meetings in Washington in April.   © AP

CHICAGO -- U.S. Treasury Secretary Steven Mnuchin plans to talk with Japan's Finance Minister Taro Aso about trade, including a requirement to refrain from manipulating currencies to gain an advantage in cross-border trade -- a measure to which Japan is strongly opposed.

A senior officer said on Tuesday that the talks will focus on trade issues, and the negotiations will include a measure to prevent from manipulating currencies. The meeting will be held on the sidelines of the Group of 20 gathering in Fukuoka on June 8 and 9.

Mnuchin is also scheduled to meet with People's Bank of China Gov. Yi Gang, making trade a core subject of the talks for the U.S., Japan and China.

The U.S. Treasury Secretary will be in Fukuoka from June 7-9 to attend the gathering. The meeting with Aso will be his first since late April. The senior officer added that the talks will deal with many subjects, including trade issues. The U.S. is passionate about negotiations with Japan, which include setting the currency manipulation rule.

The two countries are pursuing a trade agreement on goods, with automobiles and agricultural products as its pillars. Japan is strongly against the introduction of a currency manipulation rule, which reduces its discretion in trade policy.

Washington has been leery about potentially increased imports of Japanese vehicles if the yen depreciates. Mnuchin prioritizes introducing an agreement that legally limits controlling the depreciation of its currency to maintain competitiveness. The gap between the two countries' positions could spark further conflict.

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