Japan will run a US$550 billion (RM2.32 trillion) US-bound investment package agreed in Tokyo's tariff deal with Washington without any impact on the foreign exchange (forex) market, its top trade negotiator Ryosei Akazawa said on Wednesday.
"Based on our calculation, US$550 billion is within the range where there will be no forex impact," Akazawa said, speaking to reporters at the Foreign Correspondents' Club of Japan.
Japan and the US signed a memorandum of understanding on the details of the package last month, which covers Japanese investments in sectors such as chips, metals, pharmaceuticals, energy and shipbuilding to be made by January 2029.
Concerns over forex implications have become a major issue in South Korea's negotiations to formalise a US tariff deal, which would reduce US levies on South Korean imports to 15% from 25% in return for South Korea's investment of US$350 billion in the US.
Akazawa said the government may use forex reserves for loans, for example by tapping a special account of the forex fund managed by the Finance Ministry.
Japan's investment package would include equity, loans and loan guarantees from the state-owned agencies Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI).
When asked about a comment he made in July that the equity component would account for just about 1% to 2% of the US$550 billion, Akazawa clarified that the percentage was based on the past investment track records for the JBIC and NEXI.
He said it's up to Japan to decide the actual ratio when it starts investing.
Source: theedgemalaysia