Wall Street biggie JPMorgan, along with its industry peers, is reportedly close to agreeing to provide some financing under Japan’s USD 550 billion US investment pledge.
Such financing, if realised, would help Tokyo deliver on commitments made to the Donald Trump administration. As per Reuters, Japanese banks have been reluctant to participate, as their funding base is in yen, whose ongoing volatility would make obtaining huge amounts of dollars for big long-term infrastructure projects a costly affair.
Japan has thus far announced two batches of projects worth a combined more than USD 100 billion under the investment scheme, a deal that the Far East Asian nation struck in July 2025 to secure US tariffs of 15%. Trump had threatened levies of 25% on most Japanese exports.
As per the reports, Tokyo’s investment-related move has been envisioned to ensure that the 15% tariff gets maintained from the American side. In January 2026, Trump vowed to hike tariffs on imports from South Korea, claiming it had not lived up to its part in their trade deal, though he later walked that threat back.
“Washington has also sent Prime Minister Sanae Takaichi’s government a list of candidates for additional projects under the investment scheme,” claimed the Reuters report.
Japan’s Ministry of Economy, Trade and Industry, in a statement, however, denied all the claims.
Japan has only committed USD 2.2 billion in financing for the first batch of investments that were unveiled in February this year. Financing has already been extended to special-purpose companies set up to manage each project.
Of that amount, roughly one-third is being provided by state-backed Japan Bank for International Cooperation, with the remainder co-financed by the country’s megabanks: Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group.
“The three lenders have told the government that even though the government has guaranteed their loans, securing long-term dollar funds is expensive and limits their ability to extend credit elsewhere,” sources said.
To obtain dollars, Japanese banks would typically have to either issue dollar bonds, borrow in wholesale markets, or use the swap market, all of which would come with costs. Those costs can be exacerbated by the large gap in American and Japanese interest rates, along with the cost of hedging currency exposure.
“Takaichi’s government has been considering ways to help major domestic banks procure US dollars so that they can fund American projects,” sources said.
Shedding more light on the “options,” Kyodo News Agency reported that one proposal has been to utilize dollars held in the Japanese government’s foreign exchange reserves.
The first batch of projects unveiled in February includes an oil export facility in Texas, an industrial diamond plant in Georgia, and a natural gas-fired power plant in Ohio. A second batch announced in March includes plans to build small modular nuclear reactors by GE Vernova Hitachi in Tennessee and Alabama, as well as natural gas-fired power facilities in Pennsylvania and Texas.