Group 1 - The core focus of negotiations is on 18 countries that account for 95% of the U.S. trade deficit [1]

Group 1 - The U.S. Treasury Secretary and Japan's Finance Minister agree that the current USD/JPY exchange rate reflects fundamentals, emphasizing that exchange rates should be determined by the market [1] - There is an expectation that President Trump will pressure Japan during U.S.-Japan trade negotiations to allow for a weaker dollar and a stronger yen to reduce the U.S. trade deficit [1] - Nomura Securities notes that one of Trump's main goals in a potential second term is to reduce the U.S. trade deficit, typically through tariffs and a weaker dollar [1] Group 2 - The U.S. government may continue to link foreign exchange issues with tariff negotiations, pressuring Japan for concessions, as this is not the first time the U.S. has pressured for yen appreciation [2] - Japan may face significant economic risks from rapid yen appreciation, making it difficult to accept Trump's demands, with Nomura Securities estimating a potential GDP decline of 0.67% to 1.41% over two years due to yen appreciation [2]