The agreement would squash the simmering trade dispute between the two allies and stands in stark contrast to America's relationship with China.
The United States and Japan have agreed "in principle" to core elements of a trade deal that US President Donald Trump and Prime Minister Shinzo Abe said they hope to sign in New York next month.
The agreement, if finalised, would cool a trade dispute between the two allies just as a trade war between the United States and China escalates.
US Trade Representative Robert Lighthizer said the deal on Sunday covered agriculture, industrial tariffs and digital trade, but auto tariffs would remain unchanged.
Trump said Japan had agreed to buy excess US corn that is burdening farmers as a result of the tariff dispute between Washington and Beijing.
Abe referred to a potential purchase of the corn and said it would be handled by the private sector.
"It's a very big transaction, and we've agreed in principle. It's billions and billions of dollars. Tremendous for the farmers," Trump told reporters about the deal during a joint announcement with Abe at the G7 meeting in France.
The Japanese leader said more work remained, but he expressed optimism that it would be finished by the time of the United Nations General Assembly next month.
"We still have some remaining work that has to be done at the working level, namely finalising the wording of the trade agreement and also finalising the content of the agreement itself," he said, through an interpreter.
"But we would like to make sure that our teams ... accelerate the remaining work for us to achieve this goal of realising the signing of the agreement on the margins of the UN General Assembly at the end of September."
Lighthizer noted that Japan imports about $US14 billion ($A21 billion) worth of US agricultural products and said the agreement would open up markets to over $7 billion of such products. He said beef, pork, wheat, dairy products, wine, and ethanol would all benefit by the deal.
Trump last week said he had ordered US companies to start looking for alternatives to doing business in China, and is eager to help out farmers who have been hurt by the trade dispute, particularly in political swing states that he needs to support him in his bid for re-election in 2020.