FX.co ★ Japanese Yen Eases as Trump Threatens 35% Tariff

The Japanese yen edged closer to 144 per dollar on Wednesday, retreating from its highest levels of over three weeks. This movement followed US President Donald Trump's announcement of a potential 35% tariff on Japanese imports, aiming to compel Tokyo to make trade concessions. Trump characterized the trade talks with Japan as "really hard," criticizing Japan's hesitance to accept American cars and rice. In the domestic market, recent data showcased an unexpected rise in business sentiment among large manufacturers in the second quarter, highlighting economic resilience despite rising external pressures. On the international front, the yen was bolstered by increasing anticipation of dovish actions from the Federal Reserve and market apprehensions about the inflationary effects of Trump's tax-and-spending legislation, which has exerted pressure on the US dollar.