- The US dollar continues to weaken against the Japanese yen, dropping to a weekly low of under 143.60.
Trump’s proposed tariffs, along with expectations for additional supply cuts, are putting pressure on the US dollar. - Prime Minister Isba mentioned that they are significantly behind in trade negotiations with the US.
The US dollar ranks among the weakest G8 currencies on Thursday. Concerns about Trump’s new tariff threats and increased expectations of supply cuts are pushing the USD/JPY down to a fresh weekly low, below 143.60.
Recent US CPI data released on Wednesday indicated that inflation rose by 0.1% in May, showing a 2.4% increase year-on-year, which was lower than analysts’ forecasts of 0.2% and 2.5%.
This information has somewhat alleviated fears regarding the inflationary effects of Trump’s “liberation day” tariffs, fueling hopes that the Federal Reserve might consider cutting interest rates again in September. The CME Fed Watch tool now indicates nearly a 60% probability of a 25 basis point cut compared to 50% just last week.
Trump’s tariff threats are unsettling the markets
Today, President Trump stated he would send a letter to all trading partners laying out specific requests they need to agree to in order to avoid increased tariffs starting July 9. This has created a risk-averse atmosphere, offering a new direction to market sentiment.
In Japan, Prime Minister Isba noted considerable discrepancies in how trade agreements are formed with the US, making it clear that there isn’t a set timeline for finalizing any deals.
Later, Japan’s chief trade negotiator, Ryosei Akazawa, mentioned that he was unaware of any current discussions involving the US Treasury Department, indicating that negotiations would be led by Finance Minister Kato instead.
