The United States and Japan are close to a deal to curb tech exports to China's chip industry despite alarm in Tokyo about Beijing's threat to retaliate against Japanese companies, the Financial Times reported on Tuesday citing people familiar with the matter.

The U.S. and Japan are nearing an agreement to restrict chip technology exports to China, sources told the Financial Times, but Tokyo remains wary given fears of retaliation from Beijing. A Japanese official familiar with the talks cautioned that the situation is "quite fragile,

The United States and Japan are reportedly close to finalizing an agreement that will further restrict the export of advanced chip technology to China.