TOKYO: Japanese Prime Minister Shigeru Ishiba said on Tuesday (Jul 8) that he would continue negotiations with the US to seek a mutually beneficial trade deal, after President Donald Trump announced 25 per cent tariffs on goods from Japan starting Aug 1.
Trump on Monday began notifying trade partners of steep US tariff hikes, but later indicated a willingness to delay implementation if countries made acceptable proposals.
The move triggered a broad decline in the yen as expectations receded of a near-term interest rate hike.
While Tokyo and Washington have yet to reach a deal, Ishiba noted that recent talks had helped Japan avoid even steeper tariffs of around 30 per cent to 35 per cent.
“We have received a proposal from the United States to swiftly proceed with negotiations towards the newly set Aug 1 deadline, and that depending on Japan’s response, the content of the letter could be revised,” Ishiba said at a meeting with Cabinet ministers to discuss Japan’s strategy on tariffs.
Japan will “actively seek the chance of an agreement that benefits both countries, while protecting Japan’s national interest”, he added.
Uncertainty on tariffs sent the dollar to a two-week high of 146.44 yen on fading expectations of a hawkish quarterly report from the Bank of Japan on Jul 31, which would have laid the groundwork for a rate hike later this year.
“If the new deadline is set on Aug 1, the BOJ probably won’t be able to say much at the upcoming report in July,” said Takeshi Ishida, a strategist at Kansai Mirai Bank. “Market expectations of a near-term rate hike will be rolled back.”
In a press conference on Tuesday, Finance Minister Katsunobu Kato said he had no plans for now to hold talks on exchange rate matters with US Treasury Secretary Scott Bessent.
