TOKYO - Japanese Finance Minister Katsunobu Kato said on Wednesday trade negotiations with the United States could include discussions on foreign exchange rates.

"There has been various communication, including on exchange rates, from the US side, so currency moves could be among themes up for discussion. But specifics have yet to be set," Kato told parliament.

Kato also said any discussions on exchange rates would be held between the finance chiefs of the two countries.

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While not confirmed, Kato is expected to visit Washington later this month when G20 finance leaders gather on the sidelines of the International Monetary Fund spring meetings. The visit opens up the chance for Kato to hold his first face-to-face meeting with US Treasury Secretary Scott Bessent.

Given President Donald Trump's focus on addressing the huge US trade deficit, some analysts say Japan may face pressure from Washington to help reverse the yen's downtrend, which gives its exports a competitive advantage.

"The chance of an introduction of steps to guide the yen higher is not small," as Trump may favor steering the dollar lower to revitalize US manufacturers, analysts at Mizuho Securities wrote in a research note.

"The dollar-weakening, yen-strengthening measures will focus on yen-buying currency intervention by Japanese authorities and continued interest rate hikes by the Bank of Japan," they said.

The yen has actually firmed more than 7 percent against the softening dollar so far this year, after sliding around 10 percent in 2024.

Japanese Prime Minister Shigeru Ishiba and US President Donald Trump agreed to initiate bilateral discussions on tariffs in a telephone meeting on Monday.

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While Economy Minister Ryosei Akazawa has been appointed as trade negotiator for Japan, Kato is also likely to play a key role in the talks with the United States as his ministry oversees the country's exchange-rate policy.

Trump has designated Bessent and US Trade Representative Jamieson Greer to oversee trade negotiations with Japan.

"Japan remains among America's closest allies, and I look forward to our upcoming productive engagement regarding tariffs, non-tariff trade barriers, currency issues, and government subsidies," Bessent said in a post on X on Tuesday.

The United States is Japan's biggest export destination, with roughly 28 percent of the total comprised of automobile shipments.

Trump's decision to slap a 25 percent levy on automobile imports, and a reciprocal 24 percent tariff on other Japanese goods, is expected to deal a huge blow to Japan's economy, with analysts predicting the higher duties could knock up to 0.8 percentage points off economic growth.

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The market rout and global recession fears caused by Trump's tariffs have complicated the BOJ's efforts to wean the economy off massive stimulus, including by raising interest rates from still-low levels.

"Domestic and overseas economic uncertainties have heightened due to US automobile and reciprocal tariffs," BOJ Governor Kazuo Ueda told parliament, adding the central bank will carefully analyze how the US tariffs could affect the economy in setting monetary policy.