Japan said on Tuesday the trade agreement it struck with the U.S. cleared uncertainties on U.S. trade policies but continued attention needs to be given to risks of those policies putting downward pressure on the Japanese economy.

TOKYO (Reuters) -Japan's leading trade negotiator said on Tuesday that the trade deal Tokyo agreed with the United States last week guarantees Japan will always receive the lowest tariff rate on chips and pharmaceuticals of all the pacts negotiated by Washington.

The new U.S.-Japan trade deal lowers tariffs and strengthens economic ties, helping challenge China's regional aggression and instability.

Japan’s central bank policymakers are expected to keep rates on hold this week, despite the trade deal with the U.S. relieving some uncertainty over tariffs and strengthening the case for tighter policy.

President Donald Trump announced a trade agreement with Japan on Tuesday, making it the largest U.S. trade partner to broker an accord as the White House threatens to impose tariffs on dozens of countries within days.

Less than a week after President Donald Trump and Japanese Prime Minister Shigeru Ishiba agreed on a trade deal, the situation has unraveled. Japan's highly export-driven automotive industry is in disarray and there are deep divisions in how the agreement is understood.

Japan's government said on Friday that profits from a $550 billion investment package agreed in this week's tariff deal with the U.S. would be split between Japan and the U.S. according to the degree of contributions by each side.

The US and EU are racing to lock in the final details of their major new trade deal before Friday's deadline. Critics say its a rushed fix, with German Chancellor Friedrich Merz calling the outcome unsatisfying and France’s Bayrou dubbing the EU’s "submission" a "dark day.