Pic: Japan’s Trade Minister Yukio Edano

"We are closely negotiating with the United States [over waivers] and are moving forward towards mutual understanding, but it is not the case that we have reached a conclusion," Japanese Trade Minister Yukio Edano told reporters on Tuesday. 

On December 31, US President Barack Obama signed into law fresh economic sanctions against the CBI in a bid to punish foreign companies and banks that do business with the Iranian financial institution.

The United States had already barred its own banks from dealing with the Iranian Central Bank. Thus, the new US sanctions were intended to dissuade other foreign banks from doing transactions with Iran's Central Bank by threatening to cut off their access to US financial institutions.

Under the new US law, a country can be exempt from the embargoes if it significantly slashes its trade with Iran. According to US officials, many countries are in negotiation with Washington in an attempt to obtain the exemption.

Tokyo has reportedly planned to reduce its oil imports from Iran by at least 11 percent annually in an attempt to win an exemption from the US for Japanese banks.

Unidentified sources say Tokyo and Washington agreed on the terms of a plan last week and will reach a formal agreement by the end of February.

Japan is the third major importer of Iranian crude. In 2011, Japan's crude imports from Iran fell by 11.7 percent to 313,000 barrels per day.

The developments come as Japan's reliance on imported oil has sharply climbed, following a mega quake last year that forced the country to phase out most of its nuclear reactors.

Despite the widely publicized claims by the US, Israel and some of their European allies that Iran's nuclear program may include a military aspect, Iran insists on its civilian nature, arguing that as a signatory to the nuclear Non-Proliferation Treaty (NPT) and a member of the International Atomic Energy Agency (IAEA), it has the right to develop and acquire nuclear technology for peaceful objectives.

The IAEA has conducted numerous inspections of Iran's nuclear facilities but has never found any evidence indicating that Tehran's civilian nuclear program has been diverted towards nuclear weapons production.

This is while the Israeli regime is widely known to possess between 200 and 400 nuclear warheads. Furthermore, Tel Aviv refuses to allow its nuclear facilities to come under international regulatory inspections and rejects any international nuclear regulatory agreements.