FX.co ★ Japanese Yen Slides Amid Escalating Trade Tensions

The Japanese yen weakened towards 147 against the US dollar on Friday, approaching a three-week low as the US dollar gained momentum amidst escalating global trade tensions. This movement followed a series of assertive tariff announcements by US President Donald Trump, which included a 35% levy on Canadian imports and proposed tariffs ranging from 15% to 20% on most other trading partners. The focus also remained on US-Japan relations, as Trump announced a 25% tariff on Japanese goods earlier this week, set to be implemented on August 1. This decision further strained the bilateral relations between the two nations. In response, Japanese Prime Minister Shigeru Ishiba emphasized the necessity of reducing Japan's dependence on the US in key areas such as defense, food security, and energy. He described the ongoing negotiations as a "battle in which national interest is at stake." A prominent Japanese think tank projected that these tariffs could reduce Japan's GDP by 0.8% in 2025 and cumulatively by 1.9% by 2029.