Tokyo and Washington have been negotiating a deal to avoid 25% US tariffs on Japanese exports to the world's largest economy. On July 7, Trump notified several US trading partners of increased country-specific "reciprocal tariff" rates, with Japan due to be subject to 25% tariffs as of Aug. 1 unless another deal is reached beforehand.

Japanese Prime Minister Shigeru Ishiba said Monday he will stay in office to tackle challenges such as rising prices and high U.S. tariffs after a weekend election defeat left his coalition with a minority in both parliamentary chambers and triggered calls for his resignation.

Japan’s ruling coalition looked set to lose its majority in the upper house, according to exit polls, an outcome that would further weaken embattled Prime Minister Shigeru Ishiba’s leadership and potentially unsettle markets.