During high-stakes trade talks between the United States and Japan, former President Donald Trump made a surprising move that could shake global financial markets: he demanded Japan strengthen its currency, the yen. While seemingly aimed at shrinking the U.S. trade deficit, this bold proposal may carry unintended consequences for both nations.


What started as a routine policy meeting in Washington—featuring Japanese Minister of Economic Affairs Ryosei Akazawa, U.S. Treasury Secretary Scott Bessent, and Trade Representative Jamieson—took an unexpected turn. Trump walked in and insisted that currency policies be added to the discussion, despite the original focus being tariffs.


Currency Manipulation Allegations and Japan’s Rebuttal


Trump has long accused Japan of weakening its currency to gain a trade edge. Now, he's doubling down—urging U.S. negotiators to bring exchange rates into the spotlight.


Japanese Finance Minister Katsunobu Kato quickly responded, rebuffing the accusations during a parliamentary session:



“Japan is not manipulating its currency. Our recent action was, in fact, an intervention to support the yen,” Kato clarified.


While Kato expressed openness to future dialogue, he noted that no formal meeting date with Treasury Secretary Bessent had been set yet. He is expected to visit Washington for the upcoming IMF and World Bank spring meetings.


Economists Warn: A Stronger Yen Could Spell Trouble


Financial experts are raising red flags over Trump’s push. Forcing Japan to boost the yen’s value could disrupt both the Japanese economy and U.S. financial stability.



  • Rising Interest Rates? Pressure on Japan’s central bank to hike rates could stall the country’s fragile recovery and jeopardize monetary policy independence.


  • U.S. Bond Market Risks? If Japan starts offloading U.S. dollars to elevate the yen, it could rattle bond markets—particularly concerning in today’s volatile economic climate.


Wall Street Eyes Potential “Mar-a-Lago Accord”


Analysts at Citigroup suggest Japan might be one of the first targets if Trump initiates a global strategy to weaken the U.S. dollar. The plan, informally dubbed the “Mar-a-Lago Accord” (a nod to the 1985 Plaza Accord), could have sweeping effects.



“We don’t view the ‘Mar-a-Lago Accord’ as an immediate threat,” said Citigroup FX strategist Osamu Takashima,

“but countries like Japan—with significant foreign reserves and undervalued currencies—could be squarely in focus.”


Yen Rising Amid Speculation


The yen has already begun to appreciate as markets speculate that the U.S. might press Japan into a currency realignment. Trump appears to be leveraging the yen issue to tackle the long-standing U.S. trade deficit.


Back in March, Trump issued a pointed warning to both China and Japan:



“They can’t keep lowering their currency values – it’s unfair to the United States,” he asserted.



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