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Express Tribune
08-07-2025
- Business
- Express Tribune
Japan seeks trade deal with US as tariffs loom on August 1
Monitors displaying the current Japanese Yen exchange rate against the U.S. dollar are pictured at a dealing room of the foreign exchange trading company in Tokyo, Japan (Photo: Reuters) Japanese Prime Minister Shigeru Ishiba said on Tuesday that he would continue negotiations with the US to seek a mutually beneficial trade deal, after President Donald Trump announced 25% tariffs on goods from Japan starting August 1. Trump on Monday began notifying trade partners of steep US tariff hikes, but later indicated a willingness to delay implementation if countries made acceptable proposals. The move triggered a broad decline in the yen as expectations receded of a near-term interest rate hike. While Tokyo and Washington have yet to reach a deal, Ishiba noted that recent talks had helped Japan avoid even steeper tariffs of around 30% to 35%. "We have received a proposal from the United States to swiftly proceed with negotiations towards the newly set August 1 deadline, and that depending on Japan's response, the content of the letter could be revised," Ishiba said at a meeting with cabinet ministers to discuss Japan's strategy on tariffs. Japan will "actively seek the chance of an agreement that benefits both countries while protecting Japan's national interest," he added. Uncertainty on tariffs sent the dollar to a two-week high of 146.44 yen JPY=EBS on fading expectations of a hawkish quarterly report from the Bank of Japan on July 31, which would have laid the groundwork for a rate hike later this year. "If the new deadline is set on August 1, the BOJ probably won't be able to say much in the upcoming report in July," said Takeshi Ishida, a strategist at Kansai Mirai Bank. "Market expectations of a near-term rate hike will be rolled back." In a press conference on Tuesday, Finance Minister Katsunobu Kato said he had no plans for now to hold talks on exchange rate matters with US Treasury Secretary Scott Bessent. Economic Impact Japan failed to clinch a deal with the US before the July 9 expiration of Trump's temporary pause on his "reciprocal" tariffs, after it focused on eliminating a 25% tariff on automobiles - a mainstay of its export-reliant economy. With an upper house election on July 20, Ishiba has said Japan will not make "easy concessions" for the sake of an early deal with Washington. Recent media polls have shown Ishiba's ruling coalition may fail to maintain a majority in the upper house, which could complicate trade negotiations, analysts say. US tariffs also add to woes for Japan's economy, which shrank in the first quarter. Real wages in May fell at the fastest pace in nearly two years, while the government on Monday made the bleakest assessment of the economy in nearly five years. SMBC Nikko Securities expects 25% US tariffs to knock 0.26% points off Japan's economic growth in the current fiscal year ending in March 2026. "While Japan likely averted the worst-case scenario, 25% tariffs would still hurt exporters' profits by up to 25%," said Kazuki Fujimoto, an analyst at Japan Research Institute. "If corporate profits worsen, it's hard to avoid companies from toning down efforts to hike wages," he added.
South China Morning Post
03-04-2025
- Business
- South China Morning Post
US dollar weakens against yen, Swiss franc on concern of Trump tariffs' economic impact
A gauge of the USdollar slid to a five-month low as traders braced for the impact of higher American tariffs on the economy. Advertisement The Bloomberg Dollar Spot Index fell as much as 1 per cent to the lowest since November, with the US dollar sliding sharply versus the yen and Swiss franc. The euro appreciated more than 1 per cent to the strongest in six months, approaching the closely watched $1.10 level. Stocks in Europe slumped 1.8 per cent. US President Donald Trump announced Wednesday he will apply at least a 10 per cent tariff on all exporters to the US, with even higher duties on some 60 nations to counter large trade imbalances with the US. Canada said it will fight tariffs with countermeasures while China has also vowed to retaliate. The harsher-than-expected tariffs threaten to raise prices on trillions of dollars in goods imported into the US each year. US stock futures tumbled about 3 per cent, surpassing losses in Chinese shares even as the Asian nation faces a tariff of well above 50 per cent on many goods. Live footage showing US President Donald Trump during the signing ceremony for his executive orders, next to screens displaying the dollar-yen exchange rate at a dealing room of in Tokyo on January 21, 2025. Photo: Reuters. 'The aggravation of US growth concerns on the tariff news and related further falls in US stocks has meant that the dollar isn't enjoying its traditional safe haven, reserve currency status support,' said Ray Attrill, head of foreign-exchange strategy at National Australia Bank Ltd.
