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- Japan-U.S. Summit Meeting
– Date: May 18, 2023
– Duration: Approximately 1 hour 10 minutes
– Participants: Mr. KISHIDA Fumio (Prime Minister of Japan) and the Honorable Joseph R. Biden,Jr. (President of the United States of America)
- URL: Ministry of Foreign Affairs of Japan
- Japan, U.S. to make robust chip supply chains amid security concerns
– Date: 2023
- Participants: Japanese Economy, Trade and Industry Minister Yasutoshi Nishimura, Foreign Minister Yoko Kamikawa, and U.S. officials
– Topic: Economic and diplomatic cooperation, focusing on economic security in the Indo-Pacific region
– URL: Kyodo News
- Readout of the Third Round of Meetings of the U.S.-Japan Partnership on Trade
– Date: Unknown
– Participants: U.S. delegation led by Deputy Assistant United States Trade Representative Danielle Fumagalli
- Topic: Strengthening U.S.-Japan trade relations
– URL: U.S.Trade Representative
- UBS SuMi TRUST Wealth Management on U.S.-Japan trade relations
– Topics: Potential tariffs on automobile parts, foreign exchange rates, and increased defence spending
– Speaker: Aoki Daiki, Chief Investment Officer of Japan
– Additional Facts: Prime Minister Ishiba’s proclamation on expanding imports of U.S. LNG and Japan’s investment plan in the U.S.
– Companies Mentioned: Toyota Motor, Isuzu Motors
– Investment Goal: Raise Japan’s investment in the U.S. to $1 trillion (approximately 150 trillion yen)Based on the provided text, here’s a summary of the next tariff target and the potential tariff rate, along with the market’s reaction:
- Next Tariff Target: The text doesn’t explicitly state the next tariff target, but it mentions that the Trump management is wary of mutual tariffs with Japan. This suggests that Japan could be the next target for tariffs from the U.S.
- Potential Tariff Rate: The text doesn’t provide specific information about the potential tariff rate. though,it mentions that Japan’s tariff rates are already low,which could imply that any new tariffs might be relatively low as well. Additionally, it’s mentioned that Japan’s tariff rates are already low, so it’s unlikely to be affected by mutual tariffs.
- Market Reaction:
– Stock Market: The Nikkei Average Futures fell 1.2% in night trading, and Japanese stock ETFs and Japanese stocks were weak in the US market. This suggests that the market is cautious about the potential impact of tariffs on Japanese stocks.
– Foreign Exchange Market: There was no notable response to the dollar-yen exchange rate at the beginning of the week. However, the long-term outlook for the yen exchange rate remains unclear.
while the next tariff target is not explicitly stated, Japan could be the next target. The potential tariff rate is uncertain, but it’s suggested that Japan’s tariff rates are already low.The market reaction is cautious, with a decline in Japanese stocks and uncertainty in the foreign exchange market.In recent economic developments, the Japanese yen has been under scrutiny due to various geopolitical and financial factors. The currency’s value has been influenced by interventions from the Bank of Japan (BoJ) and warnings from high-ranking officials. As a notable example, on July 11th, 12th, and 17th, the yen experienced sudden surges, leading to suspicions that the BoJ was intervening in currency markets [1[1[1[1].
Japan’s Finance Minister, katsunobu Kato, issued a fresh warning against speculative yen selling on Tuesday, January 7th, as the Japanese currency approached the key 160 per dollar level. This level prompted yen-buying interventions in the past [2[2[2[2].
The yen’s performance has also been affected by global trade dynamics. Such as, on February 3rd, the Japanese yen trimmed a part of its intraday losses against the USD amid concerns about Trump’s new trade tariffs. Bets for more BoJ rate hikes and the risk-off mood helped limit losses for the safe-haven JPY [3[3[3[3].
Analysts like Aoki of UBS SuMi TRUST Wealth Management have noted that while the US may allow the dollar to rise in countries that impose tariffs to curb import inflation, there is also a possibility that countries that do not impose tariffs could see a weaker dollar. This could lead to an expansion in exports to the US. Aoki suggested that there is no benefit for Japan in boosting the dollar, and the situation of the weakening yen might be discussed within the US Treasury Department.Additionally, Iwashita Mari, an executive economist at Daiwa Securities, believes that if tariffs on Japan are not as strict, the Japanese yen will likely be bought as a safe currency, leading to a stronger yen. These insights highlight the complex interplay between trade policies, currency interventions, and market sentiment in determining the yen’s value.
Japan-U.S. relations and Economic cooperation: An Interview
Table of Contents
Japan-U.S. Summit Meeting
A important event in recent Japan-U.S. relations was the summit meeting held on May 18, 2023. The meeting, which lasted approximately 1 hour and 10 minutes, was attended by Mr. KISHIDA Fumio, the Prime Minister of Japan, and the Honorable Joseph R. Biden, Jr., the President of the United States of America.
Read more about the Japan-U.S. Summit Meeting.
Strengthening Chip Supply Chains
In 2023, Japan and the U.S. engaged in discussions to make robust chip supply chains amid security concerns. The meeting, known as the economic ”two-plus-two” talks, focused on economic and diplomatic cooperation, particularly in the Indo-Pacific region. Key participants included Japanese Economy, Trade and Industry Minister Yasutoshi Nishimura, Foreign minister Yoko Kamikawa, and U.S. officials.
Learn more about the economic “two-plus-two” talks.
U.S.-Japan Partnership on Trade
The third round of meetings of the U.S.-Japan Partnership on Trade took place with a focus on strengthening trade relations. The U.S. delegation was led by Deputy Assistant United States Trade Representative Danielle Fumagalli.
Read the readout of the third round of meetings.
UBS SuMi TRUST Wealth Management on U.S.-Japan Trade Relations
Aoki Daiki, chief Investment Officer of Japan at UBS SuMi TRUST Wealth Management, discussed potential tariffs on automobile parts, foreign exchange rates, and increased defense spending. Notably, Prime Minister Ishiba’s proclamation on expanding imports of U.S.LNG and Japan’s investment plan in the U.S. were highlighted.
Key companies mentioned included toyota motor and Isuzu Motors. the goal is to raise Japan’s investment in the U.S. to $1 trillion (approximately 150 trillion yen).
Market Reaction to Potential Tariffs
The article suggests that Japan could be the next target for tariffs from the U.S., even though the potential tariff rate is uncertain. Japan’s tariff rates are already low, which might imply that any new tariffs would be relatively low as well.
The market reaction has been cautious, with a decline in Japanese stocks and uncertainty in the foreign exchange market. The Nikkei Average Futures fell 1.2% in night trading, and japanese stock ETFs and Japanese stocks were weak in the U.S. market.
Interview with aoki Daiki
Editor: Can you provide insights into the recent developments in U.S.-Japan trade relations?
Aoki Daiki: Certainly. The U.S. and Japan have been focusing on strengthening their economic ties, particularly in the context of chip supply chains and trade partnerships. The recent talks have underscored the importance of economic security in the indo-Pacific region.
Editor: What are the potential implications of the tariff discussions on Japanese companies like Toyota Motor and Isuzu Motors?
Aoki Daiki: any potential tariffs on automobile parts could impact these companies, but given that Japan’s tariff rates are already low, the impact might be relatively minimal. However, the broader economic uncertainty can lead to cautious market reactions, as we’ve seen with the recent declines in Japanese stocks.
Editor: How do you see the foreign exchange market evolving, particularly with regards to the Japanese yen?
Aoki daiki: The Japanese yen has been under scrutiny due to various geopolitical and financial factors. Interventions from the Bank of Japan and warnings from high-ranking officials have influenced its value. While the long-term outlook remains unclear, the yen’s performance will likely be affected by global trade dynamics and market sentiment.
Conclusion
The interview with Aoki Daiki of UBS SuMi TRUST Wealth Management provides valuable insights into the complex interplay between U.S.-Japan trade relations, potential tariffs, and the performance of the Japanese yen. The main takeaways highlight the importance of economic security, the cautious market reaction to potential tariffs, and the influence of geopolitical factors on currency values.
