JPY stays focused on Trump-Abe – BTMU

Lee Hardman, Currency Strategist at BTMU noted today the relevance of the upcoming Abe-Trump meeting and its potential impact on the Japanese Yen.

Key Quotes

“The market’s focus will switch today to the upcoming meeting between President Trump and Japanese Prime Minister Abe”.

“The yen has weakened overnight following reports that currency manipulation will not be at the top of President Trump’s list for discussions according to an administration official”.

“The administration official reportedly stated that the automobile industry will be an important topic in talks. It follows earlier comments from President Trump stating that Japan had devalued the yen through aggressive monetary easing”.

“Japanese Prime Minister Abe is expected to defend Japan’s use of aggressive monetary policy easing as a means to defeat deflation”.

“The US’s large trade deficit with Japan, which totalled almost USD70 billion over the last year, will continue to leave the market nervous that President Trump could act in an attempt to readdress the balance. As a result the yen sell-off on the back of today’s report may prove only short-lived”.