07:19 AM EDT, 09/17/2024 (MT Newswires) -- The US and Japan are nearing an agreement to restrict tech exports to China's chip market, the Financial Times reported Tuesday, citing unnamed sources familiar with the discussions.

Japan is particularly concerned that China might stop exports of key minerals, especially gallium and graphite, if Tokyo agrees to the export controls deal with Washington, the report added, citing the people.

Washington and Tokyo have also discussed measures how to reduce the effect of any Chinese retaliation, according to the FT.

Prices of vital minerals in Japan are already high and numerous Japanese firms have raised concerns to the Ministry of Economy, Trade and Industry that further price hikes would make local products less competitive, the FT said, citing the sources.

"Clients need guaranteed supplies and those guarantees are now becoming very difficult," the Financial Times quoted an unnamed executive at a Japanese trading house specializing in these minerals.

"We will closely follow the developments on this front and firmly defend Chinese companies' lawful rights and interests," the FT quoted Liu Pengyu, the Chinese embassy spokesperson in Washington, as saying.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)