Japanese Yen Hits 2-Week High on Trade Deal Boost
The Japanese yen strengthened past 146 per dollar on Thursday, reaching a two-week high as optimism surrounding the new US-Japan trade deal lifted demand. The agreement sets a 15% tariff on Japanese exports to the US, notably lower than the 25% previously threatened by President Donald Trump.
Broader risk sentiment also improved amid reports of progress in US-EU trade talks. On the domestic front, Japan’s private sector growth held steady in July, supported by solid services activity, though manufacturing slipped into contraction.
However, the yen faces potential downside pressure from rising political uncertainty. Reports suggest Prime Minister Shigeru Ishiba may be considering resignation, which he has denied. The speculation follows the ruling coalition’s loss of its upper house majority in weekend elections, raising concerns over leadership stability.
Source: Trading Economics