Japan Stands Firm With U.S. Alliance Despite Tariff Ruling

Japan continues to strengthen ties with the United States even after the U.S. Supreme Court ruled reciprocal tariffs illegal, diverging sharply from the European Union, India, the United Kingdom, South Korea, and Taiwan, which have either pushed back or maintained cautious stances.

Bank of Japan Governor Kazuo Ueda said in an interview with Yomiuri Shimbun published on the 26th that the 15% global tariff to be imposed by the Trump administration "will not significantly affect Japan, as the previously applied tariff rate was already 15%."

Prime Minister Sanae Takaichi told the House of Councillors plenary session on the 25th that she would "closely monitor developments regarding the U.S.-Japan agreement with great interest." Referring to her planned visit to the United States at the end of March, she added, "I will further solidify the trust relationship with President Trump."

While U.S. legal and investment circles had widely anticipated the tariff ruling, Japan moved fastest globally to finalize its first major investment commitment to the United States just before the decision.

Analysts say Japan is capitalizing on other countries' hesitation to position itself as America's top ally while securing tangible benefits.

The bulk of Japan's first U.S. investment centers on gas-fired power generation led by a consortium of approximately 20 companies, including SoftBank Group, Panasonic Holdings, and Murata Manufacturing. This effectively gives Japanese firms a key role in U.S. data centers poised to serve global Big Tech demand.

The investment could also bolster Japan's semiconductor revival strategy. Japanese chipmaker Rapidus is advancing cutting-edge semiconductor production through technology transfer from IBM.

On currency, Japan has benefited from U.S. coordination to stabilize markets. Japanese media including Nikkei reported that the "rate check" conducted during yen weakness in January was initiated by U.S. Treasury Secretary Scott Bessent rather than at Tokyo's request. Rate checks often precede official market intervention, so the mere indication of such action tends to calm markets.

In mid-to-late January, Japan's bond market saw unusual moves, with 40-year government bond yields rising to 4%. The selloff spread to U.S. markets, briefly pushing the 10-year Treasury yield to around 4.3%. Following the rate check, the U.S. 10-year yield retreated to around 4.0%, while the yen stabilized from 158 to 155 per dollar.

With Takaichi expressing a preference for a weaker yen, observers are watching whether Washington will tacitly accept this stance. A weak yen combined with high U.S. interest rates could strengthen incentives for Japanese investment in America.

While coordinating closely with Washington, Japan faces mounting friction with China in both political and economic spheres. China's Ministry of Commerce announced on the 24th that it had added 20 Japanese companies and institutions, including Mitsubishi Heavy Industries, to its export control list, citing contributions to Japan's military buildup.

Chinese state broadcaster CCTV's social media account Yuyu Tangtian emphasized, "China will be ready to strike back at any time against actions that infringe on our legitimate interests."