Japan’s prime commerce negotiator, Ryosei Akazawa, stated on Tuesday that he met US Commerce Secretary Howard Lutnick for 2 hours in Washington on Monday.
Earlier on Monday, US Treasury Secretary Scott Bessent stated that the nation will search the very best deal for itself in tariff negotiations with Japan.
Key quotes
Met with US Commerce Secretary Lutnick for over 2 hours in Washington yesterday.
Held frank talks to hunt an settlement benefiting each Japan and the US.
Market response
On the time of writing, the USD/JPY pair is buying and selling 0.18% increased on the day to commerce at 147.56.
Japanese Yen FAQs
The Japanese Yen (JPY) is without doubt 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 threat sentiment amongst merchants, amongst different elements.
One of many Financial institution of Japan’s mandates is forex management, so its strikes are key for the Yen. The BoJ has immediately intervened in forex markets generally, typically to decrease the worth of the Yen, though it refrains from doing it usually because of political issues of its fundamental buying and selling companions. The BoJ ultra-loose financial coverage between 2013 and 2024 triggered the Yen to depreciate in opposition to its fundamental forex friends because of an growing coverage divergence between the Financial institution of Japan and different fundamental central banks. Extra just lately, the regularly 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, notably 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 determination in 2024 to regularly 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. Because of this in instances of market stress, buyers usually tend to put their cash within the Japanese forex because of its supposed reliability and stability. Turbulent instances are prone to strengthen the Yen’s worth in opposition to different currencies seen as extra dangerous to put money into.
