Economics

I picked the FT link for the headline, for being comprehensive, and not mentioning any demands. Your Japanese official is dead right in his main point, that negotiating with an extortionist is a bad idea, but almost as big of an obstacle is an extortionist with no clue other than "get something that sounds like a win for me".

So far, the Japanese offers are pretty muted, and can be temporary. Currency appreciation is a path for more competitive FDI in US, and inflation in US that can make its debt less unsustainable. The problem for Japan is that its debt to GDP is even higher than the US, and it can't afford higher interest rates. Japan is the most fragile economy on the planet, and concessions other than a few soybeans and FFs, can easily collapse the country.