Japan is bracing for a tougher line from Washington as the November 2026 midterm elections approach. The pressure isn't just about defense spending, but also about how much Tokyo pays for U.S. troops stationed on its soil, and even the value of the yen.

Japan Faces Higher US Troop Costs

Tokyo and Washington are set to negotiate a new five-year deal covering Japan's financial support for U.S. forces, starting in fiscal 2027, according to Nikkei Asia. Japan already contributes more than 200 billion yen ($1.25 billion) in fiscal 2026, but a senior Defense Ministry official says Tokyo should be ready for demands to increase that amount.

"We should be prepared for some degree of demand for an increase," the official said.

This isn't new territory. Trump has long argued that U.S. allies should pay more for their own defense. During his first term, his administration sought to more than quadruple Japan's contribution, according to former U.S. national security adviser John Bolton.

Trump Pushes Japan on Defense and Yen

The pressure extends beyond troop costs. Washington is also urging Japan to raise its defense spending to 3.5% of GDP, compared with Tokyo's current target of 2%. That's a significant jump, and it's not going over well in a country with a tight fiscal situation.

Then there's the currency front. The U.S. and Japan recently coordinated yen-buying intervention as the Japanese currency weakened. The Bank of Japan's next policy meeting is scheduled for Sept. 17-18, and markets are watching for another rate hike. If the yen stays weak, more intervention could be on the table.

Trump Eyes New Kim Jong Un Summit

In a separate but related development, Trump has directed aides to explore a possible summit with North Korean leader Kim Jong Un as early as fall 2026, potentially during Trump's November Asia trip for the APEC summit in China, the Wall Street Journal reported. On Monday, Trump said Kim had responded to his outreach and described the exchange as "very positive."

Trump has also ordered the Pentagon to substantially scale back U.S.-South Korea military exercises, arguing they were costly and sent an "inappropriate and hostile" signal to North Korea. He said his approach aimed to reduce tensions and make the situation safer, while adding that Kim had "always treated me with great respect."

It's a lot to juggle for Japan, which is caught between a demanding ally and a volatile neighbor. The coming months will show how Tokyo navigates these pressures.

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