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Credit: Reuters/Yuriko Nakao TOKYO | Mon Oct 29, 2012 10:47pm EDT TOKYO (Reuters) - Japan is seeking an exemption from proposed new U.S. sanctions against Iran that could effectively freeze Tehran's use of payments for oil, the Nikkei business daily reported on Tuesday, citing sources. Japanese Finance Minister Koriki Jojima asked U.S. Treasury Secretary Timothy Geithner at an October 11 meeting in Tokyo for Washington to exempt Japanese banks, the report said, citing unidentified sources familiar with the matter. Geithner said the matter was being considered, the report said. Japanese government officials were not immediately available for comment. Other importers of Iranian oil besides Japan are also likely to voice their opposition to the proposed new sanctions. U.S. lawmakers are considering expanding economic sanctions on Iran -- measures that already have helped push that country's currency into free fall but have not yet convinced Tehran to abandon its nuclear program. Democratic Senator Robert Menendez, a member of the Senate Banking and Foreign Relations Committees, has said he is looking at ways to freeze an estimated 30 percent of Iran's foreign currency reserves held in banks outside the country. Currently, Japanese buyers of Iranian oil pay Iran for crude imports in yen via accounts set up at Japanese banks by Iran's central bank, and the funds later get transferred to Iran's private banks. But the proposed new U.S. sanctions would effectively freeze those assets, and if the measures are implemented, Iran would no longer be able to use Japan's oil payments freely, which could further curb Japan's oil purchases from Iran, the Nikkei report said. The United States is expected to set the details of the new sanctions from now on and implement them from around February, the report added. Japan has cut Iranian crude imports significantly to comply with existing U.S. sanctions against Tehran. The West has applied sanctions on Iran because it suspects Tehran wants to develop nuclear weapons, while Iran says its nuclear program is for civilian purposes. For the first eight months of 2012, Japan imported 191,731 barrels per day of Iranian crude, down more than 40 percent from the same period a year ago, according to Reuters calculations based on data from the Ministry of Economy, Trade and Industry (METI). (Reporting by Bangalore Newsroom and Osamu Tsukimori in TOKYO; Editing by Ed Davies) World Japan Middle East Turmoil Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. 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