TOKYO, March 24 (Reuters) -

Nippon Steel's ( NISTF ) president said on Monday that the

Japanese steelmaker and the U.S. government share a mutual

understanding that its planned acquisition of U.S. Steel will

strengthen the American steel industry and manufacturing sector.

"In my opinion, the U.S. government and we are moving closer

to a mutual understanding that our acquisition of U.S. Steel

will help strengthen the U.S. steel industry and

manufacturing through investment, including equity

participation," Nippon Steel ( NISTF ) President Tadashi Imai told

reporters.

Japan's biggest steelmaker and U.S. Steel will continue

negotiations with the U.S. government to reach an agreement on

the terms of the equity purchase and future investment plans, he

added, while declining to provide any further details.

The administration of U.S. President Donald Trump filed a

motion to extend two deadlines in U.S. Steel and Nippon Steel's ( NISTF )

lawsuit against a U.S. national security panel to give the

government more time to wrap up merger talks with the firms, a

filing showed last week.

The filing is the clearest indication that Trump may allow

the deal, scuttled by his predecessor Joe Biden, to proceed in

some form.

In February, Trump, alongside Japanese Prime Minister

Shigeru Ishiba at the Oval Office, said that Nippon Steel's ( NISTF )

$14.9 billion bid for U.S. Steel would take the form of an

investment instead of a purchase.

Trump also said in mid-February that he would not mind if

Nippon Steel ( NISTF ) took a minority stake in U.S. Steel.

Imai, however, said late last month that the Japanese

company's current merger agreement with U.S. Steel will serve as

a starting point for discussions with the U.S. government

including the Department of Commerce.