Yen Under Pressure! Trump’s 35% Tariff Threat Shakes Trade Talks with Japan
The Japanese yen weakened toward 144 per US dollar on Wednesday (July 2), following a sharp warning from US President Donald Trump who threatened to impose a 35% tariff on imports from Japan. This move is seen as Trump’s latest attempt to pressure Tokyo amid increasingly tense trade negotiations. He also delivered harsh criticism over Japan’s refusal to accept US exports of cars and rice, calling the negotiations “very difficult.”
The pressure on the yen comes despite domestic economic data from Japan showing an unexpected rise in business sentiment among large manufacturers in the second quarter—reflecting economic resilience in the face of global uncertainties. However, the positive data wasn’t enough to offset the sell-off in yen driven by uncertainty over the direction of US trade policy.
On a broader scale, the yen had previously strengthened due to dovish sentiment surrounding the Federal Reserve’s interest rate policy and concerns over the inflationary impact of Trump’s tax-and-spending bill, which is expected to widen the US fiscal deficit by $3.3 trillion over the next decade. Still, Trump’s latest tariff threat against Japan has reignited caution among investors, raising the risk of a renewed trade war.
Source: Newsmaker.id
