Japanese economic advisor says Tokyo is poised to navigate U.S. tariff negotiations with multiple options

Senior economic advisor to Japan’s prime minister Takeshi Niinami revealed that Japan has “many cards” to play in tariff negotiations with the U.S. He also maintained that the country will keep its massive stock of U.S. Treasurys.

Niinami made the comments amid an upcoming three-day trip by top negotiator Ryosei Akazawa to the U.S for talks with U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer. Japan’s Chief Cabinet Secretary Yoshimasa Hayashi noted that the visit will strengthen its relationship with the U.S. and allow the country to drop tariff measures on Tokyo.

Tokyo plans to keep its U.S. Treasurys stock

Takeshi Niinami, senior economic advisor to Japan’s prime minister, said Japan will keep its massive stock US Treasurys, adding “We know that the President is [very concerned] over the bond market,” referring to US President Donald Trump.”https://t.co/omCeCX90u4

— LK Preserve (@LKPreserve) April 16, 2025

Takeshi Niinami, senior economic advisor to Japan’s prime minister, acknowledged that the nation has “many cards” to play in tariff negotiations with the U.S. The economic advisor said he is “cautiously optimistic” about the trade talks. The chairman and CEO of Japanese drinks manufacturer Suntory Holdings also argued that Japan should therefore, talk about more opportunities in the U.S. 

Niinami acknowledged that Japan has been the biggest foreign investor in the U.S. and the largest foreign holder of U.S. Treasury bonds. He also said that the country will keep its massive stock of U.S. Treasurys, which is about $1.1 trillion. Niinami stated that “we know that the President is [very concerned] over the bond market,” while referring to the U.S. President Donald Trump.

Trump argued that the bond market sell-off last week was part of the reason he reversed his reciprocal tariffs. He said, “I thought that people were jumping a little bit out of line; they were getting a little bit yippy, a little bit afraid.”

Director of the U.S. National Economic Council Kevin Hassett highlighted on April 10 that the bond market decline contributed to Trump’s decision. From April 8, the 10-year Treasury yield surged above 4.5% on speculation a big bondholder like Japan or China was dumping U.S. bonds. 

Prime minister’s senior economic advisor acknowledged the Asian economic giant could make another move to talk about military purchases from the U.S. Niinami argued that it strives to elevate defense spending to 2% of gross domestic product. The country and the U.S. have deep military relations, and Japan’s Self-Defense Forces use several U.S. equipment, such as fighter jets, helicopters, and some small arms.

“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.”

~ Takeshi Niinami, senior economic advisor to Japan’s prime minister.

Trump had imposed a 24% reciprocal tariff on Japan, but it was suspended for 90 days from April 9, leaving a 10% baseline tariff. Niinami also argued that while it’s not ideal for Tokyo to invest in the U.S. given the current situation, he believes that U.S. productivity is much higher than other countries, which makes the market attractive. He noted that he was not pleased with the current plan from the U.S. but added that “we want to keep investing in the United States.”

Japan’s chief trade negotiator visits Washington for tariff talks

Chief Cabinet Secretary Yoshimasa Hayashi acknowledged that Economic Revitalization Minister Ryosei Akazawa will visit Washington from Wednesday to Friday. Akazawa is expected to have talks with U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. He said he will “carefully think what will best serve Japan’s national interest, what will be most effective” and do his utmost in the negotiation.

Hayashi noted that the visit will be to “build a relationship of trust” between the two sides, with Tokyo requesting the U.S. to remove the tariff measures. He also believes that Japan’s government will “tackle the challenge” and work as one to resolve the issue as soon as possible. 

The country’s Prime Minister, Shigeru Ishiba, referred to the current situation as “a national crisis.” He also mentioned in a Monday parliamentary session that “haste makes waste,” and he was in no rush to conclude the negotiations with the U.S. Ishiba stated that Japan was not retaliating with tariffs against the U.S. since the measures weren’t beneficial.

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