Japanese Finance Minister Katsunobu Kato mentioned on Tuesday that he has no mounted plan proper now to carry additional talks with US Treasury Secretary Bessent.
This remark got here after stories that US President Donald Trump and Japanese Prime Minister Shigeru Ishiba failed to achieve a commerce settlement on the sidelines of the Group of Seven summit.
Market response
On the time of writing, the USD/JPY pair is buying and selling 0.10% larger on the day at 144.88.
Japanese Yen FAQs
The Japanese Yen (JPY) is among the world’s most traded currencies. Its worth is broadly decided by the efficiency of the Japanese financial 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 straight intervened in foreign money markets typically, typically to decrease the worth of the Yen, though it refrains from doing it typically because of political issues of its important buying and selling companions. The BoJ ultra-loose financial coverage between 2013 and 2024 brought about the Yen to depreciate towards its important foreign money friends because of an growing coverage divergence between the Financial institution of Japan and different important central banks. Extra lately, the step by step 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 towards the Japanese Yen. The BoJ determination in 2024 to step by step abandon the ultra-loose coverage, coupled with interest-rate cuts in different main central banks, is narrowing this differential.
The Japanese Yen is commonly seen as a safe-haven funding. Because of this in instances of market stress, buyers usually tend to put their cash within the Japanese foreign money because of its supposed reliability and stability. Turbulent instances are more likely to strengthen the Yen’s worth towards different currencies seen as extra dangerous to spend money on.
