Market Analysis

USDJPY: Trump, Trade Talks & The Yen

Speaking in Buenos Aires on Saturday following comments late last week from President Trump that had weighed on the value of the US dollar, US Treasury Secretary Steven Mnuchin was at pains to make clear that “this is not in any way the president trying to intervene in the currency markets whatsoever.” Whether the market takes that assertion at face value remains to be seen. At the very least the market has been reminded again that the current incumbent of the Oval Office has reservations about the worth to the US economy of a stronger US dollar.  Traders who feel that Trump’s comments will continue to influence the trajectory of the US dollar in the new week may cast an eye over USDJPY. Bilateral trade talks between Japanese Economy Minister Toshimitsu Motegi and US Trade Representative Robert Lighthizer are expected to take place before the end of July. Traders will have their own opinions but there is an argument that, in the coming week, these discussions could weigh on USDJPY or negatively affect risk sentiment in Tokyo.

by Neal Kimberley, External Currency Analyst.