In a significant turn of events, Japanese Prime Minister Shigeru Ishiba announced on Monday that while Japan has no intention of terminating its trade deal with the United States from 2019, it will actively express its "grave concern" regarding discrepancies tied to President Donald Trump's recent automobile tariffs.

The bilateral trade agreement established during Trump’s first term aimed to slash tariffs on US agricultural products and Japanese machinery, while also avoiding the looming threat of increased tariffs on Japanese vehicles. Although the pact did not encompass automobile trade, former Prime Minister Shinzo Abe had secured assurances from Trump that no additional national security tariffs under "Section 232" would be levied on Japanese cars.

Echoing previous commitments, Abe had confidently stated, "Between President Trump and I, this has been firmly confirmed that no further, additional tariffs will be imposed," during a press conference following the agreement.

However, Japan's optimism was short-lived as Trump's latest decision slapped a staggering 25 percent tariff on all automotive imports, including those from Japan.

Ishiba voiced his country’s concerns directly to parliament, emphasizing the inconsistencies between the newly imposed tariffs and the 2019 trade deal. He reiterated, "We will continue to convey our stance to the US from this standpoint," while maintaining that Japan does not plan to scrap the agreement altogether.

In a proactive effort to address these tensions, Japan’s chief trade negotiator, Ryosei Akazawa, recently kicked off talks in Washington, setting the stage for discussions on non-tariff barriers and currency exchange issues. Finance Minister Katsunobu Kato is also slated to travel to Washington this week for discussions with US Treasury Secretary Scott Bessent, particularly concerning the fluctuating yen.

Market speculations are running wild, with the dollar recently hitting a seven-month low against the yen at 140.615, suggesting heightened US expectations for Japan to stabilize its currency in an effort to mitigate the substantial US trade deficit.

Amid all this, Trump’s tariffs on Japanese exports remain in play, including the significant 25 percent duty on automobiles, a key sector for Japan’s export-driven economy.