Japanese Yen Gains on Haven Demand
On Wednesday, the Japanese yen strengthened beyond 146 per dollar, marking its second consecutive day of gains. This increase in value is attributed to rising demand for safer assets following President Donald Trump's announcement of extensive tariffs. The yen also gained from the dollar's weakness, as heightened concerns over an escalating global trade war, instigated by Trump's actions, raised fears of a potential U.S. recession. Such an economic downturn could prompt additional interest rate cuts from the Federal Reserve. The proposed U.S. tariffs include a 24% levy on Japanese products and a 25% duty on cars imported into the U.S. Additionally, Trump mentioned that Japan is dispatching a delegation to engage in trade negotiations with the U.S. Prime Minister Shigeru Ishiba disclosed that he urged Trump, during a phone conversation, to reconsider his tariff approach. Domestically, Japan's current account surplus reached a record high in February, bolstered by robust export growth and reduced imports, offering further support to the yen.
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