The United States and Japan are moving closer to an interim arrangement on trade, but many of the biggest issues are being put off, according to a person familiar with the matter.
Such an interim framework will not tackle the thorniest issues facing the two countries in their trade relationship and it was still possible that no final deal could be reached, the person said on condition of anonymity.
President Donald Trump touted "big progress" in tariff talks with Japan last week Wednesday after meeting with a Japanese delegation of officials. It was the first round of face-to-face talks since he announced a barrage of duties on global imports, rocking markets and stoking recession fears.
Japan's top trade negotiator, Ryosei Akazawa, visited Washington last week to kick off bilateral trade talks, which will likely include discussions on non-tariff barriers and the thorny topic of exchange rates.
Finance Minister Katsunobu Kato plans to visit Washington later this week, and he is expected to meet U.S. Treasury Secretary Scott Bessent for discussions on currency rates.
Trump has hit Japan with 24% tariffs on its exports to the U.S. although, like most of his levies, they have been paused until early July. A 10% universal rate remains in place, as does a 25% duty on cars, a mainstay of Japan's export-heavy economy.
The dollar hit a seven-month low of 140.615 yen on Monday on simmering market speculation that Japan could face U.S. pressure to prop up the yen, and help Washington reduce the huge U.S. trade deficit.