The Japanese yen fell in Asian trade on Monday against a basket of major rivals, extending losses for the second straight session against the dollar and about to plumb two-week lows amid calm trading.
It comes as intense trade negotiations between Japan and the US progress in hopes of reaching a suitable deal for both sides.
The Bank of Japan is convening this week to discuss monetary policies appropriate for the latest economic developments, and is widely expected to maintain interest rates unchanged.
The Price
The USD/JPY pair rose 0.2% today to 143.88 yen per dollar, with a session-low at 143.53.
The yen lost 0.75% on Friday, the third loss in four days, plumbing two-week lows at 144.03 on hopes for the success of the trade negotiations.
The yen lost 1.1% last week against the dollar, the first weekly loss in a month as haven demand on the yen slowed down with Trump aiming to calm and assure the global markets.
Trade Negotiations
Traders are closely monitoring any developments in US trade negotiations, especially as Trump sought to rule out any extension to the pause on high tariffs.
Asian countries such as Japan and South Korea are seeking to make temporary deals to avoid the imposition of the strict US tariffs before the 90-day pause ends in early July.
US Treasury Secretary Scott Bessent said the Trump administration is working on making trade deals with 17 trade partners, excepting China.
He reasserted the administration’s position that economic pressure will force China to the negotiation table, as they couldn’t handle 145% US tariffs.
US President Donald Trump said his team is very close to making a trade deal with Japan, however, Japan’s officials dismissed reports about talks to fix or change the forex rate between the yen and the dollar.
BOJ
The Bank of Japan is convening this week to discuss the monetary policies, expected to hold interest rates flat at 0.5%, the highest since 2008.
The BOJ will discuss the impact of the US trade war on the exports-reliant Japanese economy, which could determine the pace of rate hikes in the near future.
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