The Japanese yen fell in Asian trade on Wednesday against a basket of major rivals, extending losses against the dollar for the second straight session and about to mark a two-week trough.
The decline comes amid slower haven demand on the currency as the US and China reached a trade framework agreement following intensive negotiations in London.
The Bank of Japan is convening next week to discuss monetary policies, with the odds of a 0.25% rate hike still below 50%.
The Price
The USD/JPY price rose 0.2% today to 145.16 yen per dollar, with a session-low at 144.65.
The yen lost 0.2% on Tuesday against the dollar, marking the third loss in four days, and plumbing a two-week trough at 145.29 amid little progress in US-China trade talks.
Trade Agreement
US and Chinese trade representatives said a trade framework has been reached, with both sides seeking approval from Trump and Xi Jinping to carry on discussions.
This progress comes after an important deal reached in mid May, which stopped the enforcement of most tariffs for 90 days.
The most crucial items of the initial agreement is reducing limits on US chip exports, and China’s rare-earth minerals and magnet exports.
Japanese Rates
The Bank of Japan is meeting on June 16-17 to discuss the latest economic developments and suitable policies.
Following recent GDP growth data, the odds of a Bank of Japan 0.25% interest rate hike in June rose from 40% to 45%.
Bank of Japan Deputy Governor Shinichi Uchida said the bank will continue to raise interest rates if the economy recovers from the negative impact of US tariffs, however he still cautioned that the economic outlook remains highly uncertain.
Now traders await more Japanese data on inflation, unemployment, and wages to gather additional clues.
