Japan’s Akazawa says he had phone call with US Commerce Secretary Lutnick
Japan’s top trade negotiator, Ryosei Akazawa, said on Tuesday that he had a phone call with US Commerce Secretary Howard Lutnick for 40 minutes. Akazawa added that he agreed to actively engage in trade negotiations.
Key quotes
I held a phone call with US Commerce Secretary Lutnick.
Japan has avoided easy compromises.
Talk with Lutnick lasted for 40 mins.
I agreed with Lutnick to continue vigorous negotiations.
We are negotiating with Japan’s national interest at stake so not thinking about waiting until upper house election is over.
Won’t set deadline, including August 1, in negotiating with the US on trade.
Automobile sector is core of Japan’s economy, cannot tolerate fact 25% tariffs on automobile, auto parts are inflicting huge losses on Japan firms.
As for whether we could put something new on the negotiating table, my feeling is that we have already put all necessary issues on the table.
No point striking a deal with the US without an agreement on automobile tariffs.
Fully aware trade negotiations with the US won’t be easy as President Trump is ‘very tough.’
My job is to garner trust through sincere negotiations with US, try to find common ground step by step and come up with a full package of deal as soon as possible.
Won’t sacrifice Japan’s agriculture sector for sake of trade deal with US.
Market reaction
At the time of writing, the USD/JPY pair is trading 0.04% higher on the day to trade at 146.07.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.