The Japanese yen fell in Asian trade on Tuesday against a basket of major rivals, resuming losses against the dollar after a short hiatus yesterday and moving once again towards two-week lows amid ongoing Japan-US trade negotiations.
The Bank of Japan will convene tomorrow to discuss the monetary policies, widely expected to hold interest rates unchanged while providing some clues on the future of policy normalization this year.
The Price
The USD/JPY rose 0.4% today to 142.49, with a session-low at 141.95.
The yen rose 1.2% on Monday against the dollar, recovering from a two-week trough at 144.03.
The yen also rebounded on haven demand amid uncertainty about the US-China trade negotiations.
Trade Talks
Asian countries such as Japan and South Korea are expected to seek temporary trade deals to avoid the return of strict US reciprocal tariffs 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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