By Makiko Yamazaki and Tamiyuki Kihara
TOKYO, July 21 (Reuters) – JPMorgan and other U.S. banks are close to agreeing to provide some financing under Japan’s $550 billion U.S. investment pledge, according to two people familiar with talks between the lenders and the Japanese government.
Such financing would help Tokyo deliver on commitments made to U.S. President Donald Trump. Japanese banks have been reluctant to participate, as their funding base is in yen and obtaining huge amounts of U.S. dollars for big long-term infrastructure projects can be very costly for them.
Japan has thus far announced two batches of projects worth a combined more than $100 billion under the investment scheme — a deal it struck in July 2025 to secure U.S. tariffs of 15%. Trump had threatened levies of 25% on most Japanese exports.
Tokyo is eager to show it is making progress on its pledges, the sources said. In January this year, Trump vowed to hike U.S. 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, said one of the people and two other sources, who declined to be identified as the discussions were confidential.
Reuters was not able to learn how much funding the U.S. banks could potentially supply or for which projects. It was also not clear if the U.S. government was involved in the discussions about which U.S. banks could provide financing.
JPMorgan did not respond to a request for comment.
Japan’s Ministry of Economy, Trade and Industry said in a statement to Reuters that no decisions had been made on the participation of U.S. banks and that any decisions would be made by U.S. banks.
The ministry also said that the Japanese government had not yet shortlisted a third batch of candidate projects, adding that bilateral talks were continuing and that as a general rule, ideas can be floated and rejected.
The U.S. Department of Commerce did not immediately respond to a request for comment outside regular business hours.
ONLY A FRACTION OF NEEDED FINANCING SECURED SO FAR
Only $2.2 billion in financing has been committed for the first batch of investments that were unveiled in February. Financing is 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, separate sources have said.
To obtain U.S. 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 U.S. and Japanese interest rates as well as the cost of hedging currency exposure.
Takaichi’s government has been considering ways to help major domestic banks procure U.S. dollars so that they can fund U.S. projects, sources said.
One proposal is to utilise dollars held in the Japanese government’s foreign exchange reserves, Kyodo news agency has reported.
The three banks declined to comment on the potential for them to provide more financing.
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.
Sources said that while the participation of large U.S. banks in financing such projects would help, significant risks remain because infrastructure projects can take decades to generate returns and for debt to be fully repaid.
(Reporting by Makiko Yamazaki and Tamiyuki Kihara; Additional reporting by Miho Uranaka in Tokyo and Sumeet Chatterjee in Hong Kong; Editing by Edwina Gibbs)
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