The yen fell in Asian trade on Tuesday against a basket of major rivals, plumbing a two-week low against the dollar and on track for the third loss in four sessions on slower haven demand.
The decline comes amid signs that progress is being achieved in US-China trade talks in London, with negotiations extended for another day.
The Bank of Japan is convening next week to discuss policies, with less than a 50% chance that it would raise interest rates by 25 basis points.
The Price
The USD/JPY price rose 0.5% today to 145.29, the highest since May 29, with a session-low at 144.40.
The yen rose 0.15% on Monday against the dollar, the first profit in three days on haven demand before the US-China trade talks.
Trade Talks
High-level talks between US and Chinese officials commenced this week in London, with the hopes of reaching some sort of an initial agreement on tariffs and trade.
It comes after the Trump-Xi phone call which was described as “very positive” and paved the way for deeper communication.
Trump adviser Kevin Hassett said that reducing US chip exports restrictions could be discussed, and in return, China would accelerate shipments of rare-earth minerals.
According to the Wall Street Journal, Trump allowed his chief negotiator, Treasury Secretary Scott Bessent to set limits on tech sales and readjust export restrictions.
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.
