Dollar slips, Yen volatile as Trump announces $550B Japan trade deal
The U.S. dollar extended losses on Wednesday while the yen fluctuated after U.S. President Donald Trump unveiled a trade deal with Japan, easing some tariff concerns but creating new uncertainty due to reports that Japanese Prime Minister Shigeru Ishiba plans to resign next month.
The agreement reduces U.S. tariffs on Japanese imports to 15% from the planned 25% and includes a $550 billion investment from Japan into the United States. Trump also announced that Japan will open its markets further to U.S. cars, trucks, rice, and other agricultural products, News.Az reports, citing Reuters.
The yen initially strengthened to 146.20 per dollar, its highest since July 11, before reversing course to trade at 146.92.
"Dollar softness seems to be our opening proposition," said Michael McCarthy, strategist at Moomoo Australia, citing broader market sentiment against the greenback.
The dollar index hovered near 97.48, its lowest since July 10, marking a 6.6% decline since Trump’s April 2 “Liberation Day” tariff announcement. The deal with Japan could pave the way for additional agreements, with EU negotiators arriving in Washington later on Wednesday.
The Australian dollar rose 0.19% to $0.6568, while the New Zealand dollar gained 0.25% to $0.60175. The euro slipped 0.15% to $1.1737 but remained close to its four-year high.
Markets remain on edge amid global trade uncertainty and questions about Federal Reserve independence, as Trump continues to pressure Fed Chair Jerome Powell over interest rate policy.
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