Japan’s chief commerce negotiator Ryosei Akazawa indicated his intention to advance tariff talks with america in time for a June assembly between US President Donald Trump and Japan’s Prime Minister Shigeru Ishiba, per Bloomberg.
Key quotes
Goals to advance tariff talks with the US.
Aim of reaching an final result through the Group of Seven summit in June.
Stated there was progress in negotiations.
Willingness to cooperate in shipbuilding.
Market response
On the time of writing, the USD/JPY pair is buying and selling 0.14% larger on the day to commerce at 142.75.
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 elements.
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 generally, typically to decrease the worth of the Yen, though it refrains from doing it typically on account of political issues of its major buying and selling companions. The BoJ ultra-loose financial coverage between 2013 and 2024 brought about the Yen to depreciate in opposition to its major foreign money friends on account of an rising coverage divergence between the Financial institution of Japan and different major central banks. Extra just lately, the steadily unwinding of this ultra-loose coverage has given some assist to the Yen.
Over the past 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 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 that in occasions of market stress, buyers usually tend to put their cash within the Japanese foreign money on account 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 spend money on.
