FX.co ★ Japanese Yen Strengthens Despite Tariff Worries

On Tuesday, the Japanese yen rose towards 143.5 per US dollar, marking its strongest point in over two weeks, amidst escalating trade tensions with the United States. President Donald Trump issued a warning of new tariffs on Japan, criticizing Japan's resistance to importing American rice. He also confirmed that the existing 25% tariff on Japanese auto imports would remain due to the ongoing trade imbalance. These comments come as a crucial deadline approaches, with market observers keenly awaiting whether Japan will secure a trade deal with the US before the 24% reciprocal tariff rate is reinstated next week. Domestically, Japan's latest Tankan survey revealed an unexpected increase in business sentiment among large manufacturers in the second quarter, demonstrating resilience despite mounting external challenges. Furthermore, the yen found additional strength from a declining US dollar, which fell amid increasing concerns regarding the US fiscal situation and uncertainties in pending trade negotiations.