Latest news with #PlazaAccord
AllAfrica
22-07-2025
- Business
- AllAfrica
In bewildered Japan, pro-American ruling party loses an election
The country posing the greatest strategic threat to the United States is China. The Asian country most able to help the US meet that threat is Japan. You might think, then, that the Trump administration would give Japan a break in the tariffs it's imposing on countries everywhere. Think again. The president has imposed a 25% tariff on everything Japan ships the US. That's well above the administration's 10% baseline tariff, which is about three times the average US tariff level under previous administrations. Never mind that the two countries signed a trade agreement during the first Trump administration that lowered numerous Japanese barriers to US agricultural products. Never mind that Japan has agreed to allow its factories to produce Patriot missiles for the US. Or that Japan is cooperating with the US, the United Kingdom and Australia on the one hand and South Korea on the other to help the US meet the China challenge. Japanese negotiators have made numerous trips to Washington in hopes of making a deal. They've returned to Tokyo empty-handed. It's still possible a deal could be reached before the August 1 deadline. But the prospects aren't promising. According to respected Japan expert Jesper Koll, the Japanese are bewildered at the way their country is being treated. This, he said, is undermining the ruling Liberal Democratic Party's reason for being – 'to be America's independent but loyal agent in liberated-by-America-now-democratic Japan.' The LDP appears to have suffered a big loss in the upper-house election held July 20 and while domestic inflation and immigration were probably the most important issues in the defeat, the government's inability to head off American tariffs undoubtedly played a role. I recently asked someone with first-hand knowledge of Trump's thinking on trade to handicap the chances of Japan reaching a deal. He said that unlike the outlook for some of the other countries trying to negotiate deals, Japan's fate rests with Trump personally – and no one knows for sure what the president will decide. But there are two reasons for pessimism. One is that Trump is fixated on imported cars, and more than anything Japan wants a lower tariff on its auto exports. Of the 3,000 things Trump thinks about when he contemplates trade, the source said, '3,000 and one are automobiles.' (The administration has actually imposed a 25% tariff on all foreign autos, not just Japan's, and has made an exception only for the UK, which only ships about 100,000 cars a year to the US. Against Japan the tariff is 25% on everything.) The other reason for pessimism is that Trump's view of Japan seems stuck in the 1980s and early 1990s, when economic friction between the two countries was a constant. In 1987, Trump took out full-page ads in major newspapers blasting Japan for taking advantage of the US. Part of what Trump remembers is real-estate related. After the 1985 Plaza Accord, which nearly doubled the value of the Japanese yen against the U.S. dollar, American real estate suddenly looked cheap to Japanese investors. They outbid Trump on some choice deals in New York City. He has a long memory. Another part of what Trump remembers may reflect his friendship with Lee Iacocca, who was CEO of Chrysler from 1979 to 1992 and a national celebrity. Iacocca, like many in Detroit in those days, was intensely anti-Japanese. Iacocca and Trump invested in Florida real estate together. I was Detroit bureau chief of The Wall Street Journal in 1984 and 1985 and at one point I traveled with Iacocca for a couple of days. I admired his charisma, but I thought he was wrong about Japan. The Journal had sent me to Detroit after I'd spent nearly four years in Tokyo because, as the paper's top editor put it when he gave me the assignment, 'Japan is kicking Detroit's ass and we need someone leading our worldwide auto coverage who understands Japan.' Iacocca and his fellow Detroit Japan-bashers thought they were losing market share to Japan because the Japanese were cheating – low wages, undervalued currency, that sort of thing. The truth was simpler. Japan was making better cars than Detroit and American car buyers increasingly knew it. Yes, the yen was undervalued in the early 1980s, but after Plaza it was overvalued and Japanese car sales continued to grow. Trump seems obsessed with the failure of American cars to find customers in Japan. There was a time when Japan erected barriers to imports. Today, though, the Germans sell tens of thousands of cars there. Detroit makes little effort in Japan, probably because its big money-makers – large SUVs and pickup trucks – aren't what most Japanese car buyers are looking for. If the LDP can't get the U.S. to ease up on the 25% tariffs it could well lose control of the government. The party replacing it would be less likely to partner enthusiastically with the US. in meeting the China challenge. Whether that possibility might influence Trump's decision remains to be seen. Former longtime Wall Street Journal Asia correspondent and editor Urban Lehner is editor emeritus of DTN/The Progressive Farmer. This article, originally published on July 21 by the latter news organization and now republished by Asia Times with permission, is © Copyright 2025 DTN/The Progressive Farmer. All rights reserved. Follow Urban Lehner on X @urbanize
Asahi Shimbun
10-07-2025
- Business
- Asahi Shimbun
Japan unlikely to face U.S. pressure to strengthen yen, ex-top FX diplomat says
Light is cast on a U.S. one-hundred dollar bill next to a Japanese 10,000 yen banknote in this picture illustration shot February 28, 2013. (REUTERS) Japan is unlikely to face pressure from the United States to intentionally strengthen the yen despite President Donald Trump's criticism of its large trade surplus with the U.S., former top currency diplomat Masatsugu Asakawa told Reuters. Trump's focus on addressing the U.S. trade deficit and his remarks about Japan maintaining a weak yen have fueled speculation about potential pressure on Tokyo to adjust the yen's value against the dollar and give U.S. manufacturers a competitive advantage. Asakawa said the dollar's status as a global reserve currency remains solid; however, it has become more susceptible to selling pressure following Trump's April 2 announcement of sweeping 'reciprocal' tariffs. 'If the dollar weakens, that accelerates U.S. inflation, a risk (U.S. Treasury Secretary Scott) Bessent is probably well aware of,' he said in an interview late on Wednesday. 'My understanding is that there is no specific discussion on currency matters between Bessent and (Japanese Finance Minister Katsunobu) Kato in the context of trade talks,' Asakawa said. Asked about the likelihood of a coordinated dollar depreciation akin to the 1985 Plaza Accord in which Washington led the G7 advanced nations to weaken the U.S. currency, he dismissed the possibility. 'A second Plaza Accord is unlikely,' he said, citing the need for agreement from China and Europe. Asakawa retains close contact with incumbent policymakers. As vice finance minister for international affairs from 2015 to 2019, Asakawa was deeply involved in Japan's trade and currency negotiations with the U.S. during Trump's first term as president from 2017. During Trump's first term as president, then Japanese Prime Minister Shinzo Abe successfully persuaded the U.S. president to leave exchange-rate matters in the hands of their finance chiefs, Asakawa said. 'Since then, the notion that currency matters should be left to the finance leaders appears embedded within the U.S. administration,' he said. In their first face-to-face talks in April, Kato said he agreed with Bessent to continue 'constructive' dialogue on currency policy, but did not discuss setting currency targets or a framework to control yen moves. The dollar index, which reflects its performance against a basket of six other currencies, has had its worst first half of the year since 1973, declining some 11%. So far this year, the dollar has fallen 7.5% against the yen. Asakawa said the outcome of bilateral trade negotiations was hard to predict, with Trump showing little sign of heeding Tokyo's efforts to gain concessions on automobile tariffs. Trump ramped up his trade war on Monday, telling 14 nations that they now face sharply higher tariffs from a new deadline of August 1. Japan would see tariffs go up to 25% from 10%, unless it can negotiate a deal with Washington. Japan has several cards it can use in trade talks with Washington such as pledging to boost investment in the U.S., reviewing domestic car safety standards and contributing to liquefied natural gas (LNG) projects in Alaska, Asakawa said. 'Instead of presenting them incrementally, it's better to deliver them as a single package,' he said. After heading the Asian Development Bank until February, Asakawa is currently president of the Tokyo-based Institute for International Monetary Affairs.
Yahoo
10-07-2025
- Business
- Yahoo
Japan unlikely to face US pressure to strengthen yen, ex-top FX diplomat says
By Leika Kihara and Takaya Yamaguchi TOKYO (Reuters) -Japan is unlikely to face pressure from the United States to intentionally strengthen the yen despite President Donald Trump's criticism of its large trade surplus with the U.S., former top currency diplomat Masatsugu Asakawa told Reuters. Trump's focus on addressing the U.S. trade deficit and his remarks about Japan maintaining a weak yen have fuelled speculation about potential pressure on Tokyo to adjust the yen's value against the dollar and give U.S. manufacturers a competitive advantage. Asakawa said the dollar's status as a global reserve currency remains solid; however, it has become more susceptible to selling pressure following Trump's April 2 announcement of sweeping "reciprocal" tariffs. "If the dollar weakens, that accelerates U.S. inflation, a risk (U.S. Treasury Secretary Scott) Bessent is probably well aware of," he said in an interview late on Wednesday. "My understanding is that there is no specific discussion on currency matters between Bessent and (Japanese Finance Minister Katsunobu) Kato in the context of trade talks," Asakawa said. Asked about the likelihood of a coordinated dollar depreciation akin to the 1985 Plaza Accord in which Washington led the G7 advanced nations to weaken the U.S. currency, he dismissed the possibility. "A second Plaza Accord is unlikely," he said, citing the need for agreement from China and Europe. Asakawa retains close contact with incumbent policymakers. As vice finance minister for international affairs from 2015 to 2019, Asakawa was deeply involved in Japan's trade and currency negotiations with the U.S. during Trump's first term as president from 2017. During Trump's first term as president, then Japanese Prime Minister Shinzo Abe successfully persuaded the U.S. president to leave exchange-rate matters in the hands of their finance chiefs, Asakawa said. "Since then, the notion that currency matters should be left to the finance leaders appears embedded within the U.S. administration," he said. In their first face-to-face talks in April, Kato said he agreed with Bessent to continue "constructive" dialogue on currency policy, but did not discuss setting currency targets or a framework to control yen moves. The dollar index, which reflects its performance against a basket of six other currencies, has had its worst first half of the year since 1973, declining some 11%. So far this year, the dollar has fallen 7.5% against the yen. Asakawa said the outcome of bilateral trade negotiations was hard to predict, with Trump showing little sign of heeding Tokyo's efforts to gain concessions on automobile tariffs. Trump ramped up his trade war on Monday, telling 14 nations that they now face sharply higher tariffs from a new deadline of August 1. Japan would see tariffs go up to 25% from 10%, unless it can negotiate a deal with Washington. Japan has several cards it can use in trade talks with Washington such as pledging to boost investment in the U.S., reviewing domestic car safety standards and contributing to liquefied natural gas (LNG) projects in Alaska, Asakawa said. "Instead of presenting them incrementally, it's better to deliver them as a single package," he said. After heading the Asian Development Bank until February, Asakawa is currently president of the Tokyo-based Institute for International Monetary Affairs. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Irish Examiner
06-07-2025
- Business
- Irish Examiner
Jim Power: Weak dollar adds to challenges for the EU — including Ireland
As we approach the end of the first six months of US president Donald Trump's second coming, we can conclude that it has been dramatic, chaotic, uncertain, volatile — or whatever other adjective one chooses. However, the significant decline in the value of the dollar has been one of the most noteworthy developments. One might be tempted to conclude that the descent of the dollar is indicative of failure and a loss of confidence in its primacy, but this is exactly what Mr Trump set out to do. Mr Trump seems to be forcing the US's trading partners into a 'Mar-a-Lago accord', which is the idea that the US could compel other countries to accept a weaker dollar and lower interest rates on their US Treasury investments in order to be still protected by the US security umbrella. This has shades of the 'Plaza Accord' of 1985, where the UK, France, West Germany, and Japan agreed to work with the US to weaken the dollar. Why Trump wants a weaker dollar The reason Mr Trump wants a weaker dollar is because he believes that the strong dollar has contributed to the demise of the 'American dream' through the dismantling of the US manufacturing base and the loss of blue-collar jobs. His logic is that the reserve currency status of the dollar has damaged the US export base and forced the US to become dependent on imports, and hence become increasingly dependent on the outside world. He has set out to change this and is doing everything in his power to weaken the currency. He is succeeding. When he took office in late January, the dollar was trading around $1.0250 against the euro and, today, it is trading at just under $1.18, which is equivalent to an appreciation of about 15% in the value of the euro against the US unit. This will obviously make eurozone exports to the US much less competitive and will make imports into the US that much more expensive. Tariffs will compound the issue The big issue overlying all of this is that next week we may get some clarity on the tariff regime between the EU and US — and while a decision might be postponed further, there is a growing sense that 10% tariffs could apply on EU exports to the US eventually. This would not be a bad outcome, given how much worse it might be. However, if a 10% tariff is combined with a currency appreciation of approximately 15%, it would make EU exports to the US significantly less competitive. Mr Trump's hope is that this will force US consumers and businesses to substitute imports with domestically produced goods. Challenge for Ireland's exports As a key exporter to the US, the challenges for Ireland are clear. While there is massive global criticism of Mr Trump's policies, the US economy is still significantly outperforming the eurozone, with employment data last week showing that the labour market remains buoyant. Furthermore, data published last week shows that in May, the US collected $24.2bn (€20.5bn) in tariff revenues, which is almost four times higher than a year ago. All of this adds up to the possible conclusion that not alone is Mr Trump getting everything he wants, but the policies may be working for the US. It is still too early to jump to any definitive conclusions, but the omens so far will certainly please Mr Trump. ECB faces risk of deflation For the European Central Bank, there is now a growing concern that the appreciation of the euro will be very deflationary, with the risk that inflation might significantly undershoot the 2% rate. The only way to respond to that would be to cut interest rates further, so the outlook for Irish borrowers might just get better over the coming months.
The Market Online
02-07-2025
- Business
- The Market Online
Currency Shifts, Gold Lifts, and the CSE Goes Global
INTERVIEW TRANSCRIPT: ANNA Hi, my name's Anna Serin, and I'm Director of Listings Development with the Canadian Securities Exchange. You're joining us for episode five of The Market This Month . We're in a very interesting moment for global markets, and at the center of it all is the U.S. dollar. Over the past few months, we've seen a notable decline in the currency against other global currencies, particularly against the Canadian dollar. Behind that move is not just monetary policy or economic data, but something more philosophical—something being quietly referred to as the Mar-a-Lago Accord. The Mar-a-Lago Accord is the framework guiding the Trump administration's second-term trade and currency agenda. It aims to reduce U.S. trade deficits by addressing what it views as structural imbalances in the global economy, particularly the overvaluation of the dollar. It combines broad tariffs, potential currency interventions, and rethinking of international economic relationships, including proposals to link trade access with national security cooperation. This proposal is a conceptual revival of the 1985 Plaza Accord, but with a very different tone. Rather than a coordinated global effort to stabilize currencies, this new proposal suggests the U.S. should take deliberate steps to weaken the dollar to boost exports and reduce trade deficits. The idea is rooted in the belief that the dollar's role as a reserve currency makes it structurally overvalued. While this isn't official policy yet, it's already having real-world effects. Investors are watching closely as the market starts to react—from commodities to small caps to capital flows in and out of North America, we're seeing early signs of structural shifts. Today, we'll break down what this all means for Canadian markets, for investors, and for public companies. We'll talk about who stands to benefit from a weaker dollar, whether the rally of gold is sustainable, and what recent moves in the market might signal about the future of small caps. I'm joined by my wonderful co-host, Bruce Campbell with Stonecastle Investments. Thank you for joining me, Bruce. BRUCE Hey, Anna. Good to be here. ANNA We're joining each other virtually this month. I'm sad not to have you live in the studio, but hopefully you're enjoying sunshine in Kelowna while we get a little bit of January in Vancouver. BRUCE Yeah, it's been good here, for sure. ANNA Good. Let's jump right into it. Obviously, our big focus today is the U.S. dollar. We know the U.S. dollar affects global markets and currencies. My question is: the dollar has dropped—is it weak, or are other global currencies strong right now? BRUCE To answer your question: both. The dollar is relative to other currencies, and we've seen it decline versus others, so it has been weak. The rapid drop and the percentage move has been significant. As the market ran into volatility at the beginning of the year, the dollar strengthened, which is normal. We tend to see the U.S. dollar as a flight to safety. Then, as things started to stabilize and more about the Mar-a-Lago Accord came out, with both Bessant and Trump talking down the dollar, it declined. We've seen a fairly significant move so far. ANNA This will have a lot of ripple effects. Can you talk about how this might affect the Canadian markets? BRUCE The biggest thing is the inverse correlation between commodities and the U.S. dollar. Typically, when the dollar declines, commodity prices go up. Last year, we saw a strong move in gold even as the dollar was stable. Now, gold is hitting new highs as the dollar sells off. Other metals like platinum, palladium, and silver have started to move. Oil has recently started to move too. Many point to political issues like tensions in the Strait of Hormuz, but oil was trending up before that. It could be a function of investors reacting to the dollar's decline or anticipating geopolitical heat. Commodities moving typically creates inflationary pressure, which we haven't talked about in a few months. Canada is so dominated by commodities that our market has outperformed the U.S. so far this year. ANNA This creates opportunity for us. It feels so counterintuitive to purposefully create a weaker dollar, doesn't it? BRUCE They certainly want to make strategic moves they feel will help their economy both short and long term. ANNA Just to clarify, they're doing this to strengthen export abilities? If the dollar is expensive, it makes it harder to do business with other jurisdictions. Plus, they're trying to bolster their economy? BRUCE Exactly. In Canadian dollar terms, a few months ago we bottomed out around 68 cents. Now it's in the 73 cent range. That's a significant move. It has an impact—goods priced in U.S. dollars are now a bit cheaper than they were three or four months ago. ANNA It'll be interesting to see how that plays out. Let's talk about gold. These are pretty unreal prices, but we're also seeing some misalignment. Are we in a gold rush or a bubble? BRUCE I wouldn't say we're in a bubble. If you look at inflation and gold, it makes a lot of sense. Gold typically tracks inflation. One long-held metric is that the price of a good quality men's suit should be about the same as an ounce of gold. That seems to hold true. However, some indicators show it's potentially extended. Bank of America does a weekly fund manager survey. Right now, they say gold is fairly overvalued and the U.S. dollar is the least favored asset—it hasn't been this out of favor since 2005. Gold is the most over-owned asset class in the survey. Most of last year, that label belonged to the Mag 7. While some of those stocks have shifted, they haven't fallen apart. Same could be said for gold—it's moved sideways over the last month. Even though the dollar is declining, gold hits new highs, then pulls back. So I wouldn't say it's in a bubble, but we shouldn't be surprised if it stabilizes or drops $200–300 over a short period. ANNA: So, good for them. They've obviously done a really great job to have that much support in the markets. I also wanted to mention Dragonfly. They're a drone technology firm. They just raised 3.6 million US under their NASDAQ listing. I thought this was interesting because we're starting to see more and more drone companies coming to the market, which I thought was interesting. That technology really is starting to get implemented in many different ways. We have some other companies coming to us that have some neat drone technology. But also, I wanted to ask you — they are raising money in the US, and I was curious with what's been going on in our political framework. Some of our issuers wonder how US investors feel about investing in Canadian securities right now. What are your thoughts on that? BRUCE: It's definitely a vote of confidence. The fact that these US investors stepped in and invested — and they also did in US dollars — which is great to see as well. ANNA: Absolutely. Well, congratulations to Dragonfly. And then finally, just wanted to mention King Global Ventures. They closed an oversubscribed private placement of $5.5 million. The proceeds will fund ongoing exploration and drilling at their Black Canyon Project in Arizona, which includes 213 contiguous concessions and 15 former operating mines within that asset, including the past-producing Howard Copper Mine. The company is focused on precious and base metals exploration across North America. We continue to see, month by month, these nice little exploration capital raises. I know the markets have been tough in the junior and growth side, but we are seeing these nice little chunks getting raised. What are your thoughts on that? Is this specialized money? Where is this coming from? BRUCE: Well, the taps haven't been fully turned on, but in a case like this, where they have old past mines that became uneconomic at some point due to what it cost to mine and metal prices, and now you've seen metal prices rising — it becomes economic again. Turn those lights back on. This is kind of the story of the last couple years — not so much the pure exploration like 'we're going to dig a hole and try to find something,' but more like, 'Hey, we know there's something there, and we just want to restart it and get it producing cash flow.' It's going to take a little money to get there, and then they'll have the cash. ANNA: That's amazing. Well, congratulations to all of those CSE issuers on doing so well. Okay, Bruce, before we talk again in a month from now, what should we be thinking about in the markets? BRUCE: Lots to watch. We've talked a bit about the bigger picture markets — are we in a bull or a bear? Hopefully we get some clarity on that direction. With that comes sector leadership — what sectors are going to be leading, and where the opportunities lie for the next 6, 12, 24 months. ANNA: Alright, well I look forward to chatting with you again in a month. Thank you all for joining us for episode four of The Market This Month. We will be back in June for episode five. We have the Summit on Responsible Investment coming up — we'll be in your hometown of Kelowna. For anyone locally, please come and join us. All the information can be found on our website. We will be releasing content all summer long highlighting our issuers in the space, so stay tuned. If you go to our YouTube page, feel free to hit subscribe and we'll let you know when new content comes to our CSE TV. Thank you again for joining us, Bruce, and look forward to chatting next month. BRUCE: Yeah, exactly. Join the discussion: Find out what everybody's saying about this junior gold and silver mining stock on the Outcrop Silver and Gold Corp. Bullboard and check out Stockhouse's stock forums and message boards. The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
