Japan’s prime commerce negotiator, Ryosei Akazawa, stated on Thursday that Japan can not settle for 25% auto tariffs. Akazawa additional acknowledged that officers will proceed tariff talks with the US (US).
Key quotes
Japan can not settle for 25% auto tariffs.
Will proceed tariff talks with the US, with extra reciprocal tariffs due on July 9 in thoughts.
Market response
On the time of writing, the USD/JPY pair is buying and selling 0.20% decrease on the day to commerce at 144.90.
Japanese Yen FAQs
The Japanese Yen (JPY) is likely one of the world’s most traded currencies. Its worth is broadly decided by the efficiency of the Japanese economic system, however extra particularly by the Financial institution of Japan’s coverage, the differential between Japanese and US bond yields, or danger sentiment amongst merchants, amongst different components.
One of many Financial institution of Japan’s mandates is foreign money management, so its strikes are key for the Yen. The BoJ has instantly intervened in foreign money markets typically, typically to decrease the worth of the Yen, though it refrains from doing it typically as a consequence of political issues of its principal buying and selling companions. The BoJ ultra-loose financial coverage between 2013 and 2024 prompted the Yen to depreciate in opposition to its principal foreign money friends as a consequence of an growing coverage divergence between the Financial institution of Japan and different principal central banks. Extra not too long ago, the steadily unwinding of this ultra-loose coverage has given some assist to the Yen.
During the last decade, the BoJ’s stance of sticking to ultra-loose financial coverage has led to a widening coverage divergence with different central banks, significantly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Greenback in opposition to the Japanese Yen. The BoJ resolution in 2024 to steadily abandon the ultra-loose coverage, coupled with interest-rate cuts in different main central banks, is narrowing this differential.
The Japanese Yen is usually seen as a safe-haven funding. Which means in occasions of market stress, traders usually tend to put their cash within the Japanese foreign money as a consequence of its supposed reliability and stability. Turbulent occasions are more likely to strengthen the Yen’s worth in opposition to different currencies seen as extra dangerous to put money into.
