In spite of criticism from American lawmakers across the political spectrum about the Trans-Pacific Partnership (TPP), analysts in Japan still believe the trade deal will eventually be concluded.
US lawmakers, including Democrats, said on Thursday that the 10-nation trade liberalisation pact would not win congressional approval anyway, unless it also addresses alleged currency manipulation by Japan.
As part of Prime Minister Shinzo Abe's aggressive economic reform policies - dubbed "Abenomics" - the yen has weakened greatly against the dollar. This, according to some Democrats, is an example of Tokyo manipulating its currency and will make it impossible for Congress to approve the TPP deal.
During a hearing of the Senate Finance Committee, several senators warned that Democrats would not support the TPP unless it contained rules against artificially weak currencies.
"We feel very strongly about this, so when we talk about trying to pass TPP, I'm not sure how that passes," said Democrat Debbie Stabenow, whose state of Michigan is home to major carmakers worried about losing market share to Japan.
Republicans are generally supportive of trade deals, but the Republican-controlled House is unwilling to push on with the fast-track bill until the Senate, where Democrats have the majority, agrees to support it too.
"The political clock is ticking and it won't be long until we will lose the small window we have to pass significant trade legislation this year," said Orrin Hatch, the committee's top Republican.
US Trade Representative Michael Froman said his office was prepared to work with the committee "as and when" it was ready to move ahead with the legislative process.
"Every country does that and it's not called currency manipulation," Jun Okumura, a visiting scholar at the Meiji Institute for Global Affairs, told the South China Morning Post.
"I'm an optimist in the sense that I think this allegation will fall by the wayside," he said. "I don't see the Republicans blocking TPP just to annoy President Obama and it's hard to believe the Democrats will abandon the president on this issue."
Okumura said he was not surprised that no agreement was reached between the two leaders in Tokyo and he believes that meaningful progress will only be made once the midterm elections are over in the US.
Martin Schulz, senior economist with the Fujitsu Research Institute, said he is optimistic about the future of the deal over the long term, but added that chances to sign the pact had been missed.
"The window of opportunity that existed last winter was closed because Japan was not able to move fast enough and after the big push ahead of Obama's visit, I believe an agreement is now quite unlikely," he said.
"There may be a slight window of opportunity in the early summer months, but after that the US goes into mid-term elections and then there is the presidential campaign that will begin in the new year. Unless something can be achieved in those very brief periods, I fear the sides will not be able to reach agreement and sign the deal for another year or more."
The deadline for the pact, which would cut tariffs and other barriers to trade, has been pushed back. But Froman said the administration would work to conclude negotiations by the end of the year. The US and Japan are by far the biggest players in the pact that would account for more than a third of global trade.
Additional reporting by Reuters, Associated Press