US and Japan Will Discuss Trade Relations This Month

Forex News

US President Donald Trump will discuss mutual trade and investment ties with Japanese Prime Minister Shinzo Abe during his visit to the US this month. Japan, one of the closest allies of the United States, has not received exemption from new tariffs for steel and aluminum in the United States.

Japan has long maintained a multilateral framework, since its export-dependent economy has largely benefited from global free trade. Japanese officials say they will resist bilateral trade deals with the United States, even if it reduces the likelihood of getting exemptions from Washington's recently imposed tariffs on steel and aluminum.

Some officials stated, that the US President can again attack the policy of Prime Minister Shinzo Abe in relation to the weak yen. In January 2017, Trump claimed that Japan used the "money supply" to weaken the yen and provide exporters with an unfair advantage. Any such concerted pressure could bind Tokyo's hands in dealing with a climb in the yen, which would hurt the nation’s export-reliant economy that has been growing but may not be resilient to such a sideswipe.

Fears of a global trade war have boosted investors' demand for the safe-haven yen and pushed up the Japanese currency to around 106 against the US dollar. Japanese policymakers have warned that the yen's 7% gain against the dollar this year is too volatile a move, though such verbal warnings have had little effect in keeping yen rises in check.