After the meeting, the US and Japan Treasury Secretary stated: The US side

Source: Wall Street News

According to the Global Times, after Japan and the United States failed to reach a consensus on two consecutive rounds of trade negotiations with the United States, the Japanese and American governments planned to hold the third round of Japan-US tariff negotiations after the G7 Finance Ministers and Central Bank Governors meeting held in Canada this week.

Katsunobu Kato also said after the meeting that he confirmed his existing views on foreign exchange issues with Becente and did not discuss foreign exchange levels with Becente, and foreign exchange should be decided by the market.

Affected by the news, the yen weakened, falling 0.5% against the US dollar, hitting the level of 144.40, becoming the worst performer of the G10 currency in the early Asian session on Thursday.

Regarding the US-Japan negotiations, another focus of the market is whether Japan will use reducing its holdings of US bonds as a bargaining chip.In response, Katsunobu Kato pointed out after the meeting that he had not discussed the issue of US Treasury with Becent.

This is the second face-to-face meeting between the two finance ministers in a month, after they met in April.

Exchange rate issues have always been a sensitive nerve in the economic and trade relations between the United States and Japan. The Trump administration has repeatedly accused Japan of deliberately maintaining a weak yen to gain a trade advantage.The U.S. and Japan have agreed to separate the difficult exchange rate issue from direct trade negotiations and leave it to a settlement between the Treasury Secretary.

For Japan, large fluctuations in which direction the exchange rate fluctuates may increase its risk of falling into recession.If the yen depreciates sharply, it will intensify inflationary pressure; if the yen appreciates sharply, it will squeeze the momentum of corporate profits and wage growth.Japan's economy has shrunk in the first quarter of this year amid trade concerns that have affected consumer sentiment.

At present, the progress of US-Japan trade negotiations has stagnated, and automobile tariffs have become the main choke point.According to Xinhuanet, Japanese Prime Minister Shigeru Ishiba said on the 12th that he could not accept reaching an agreement with the US without including the automotive field, nor would he sacrifice agriculture for the sake of the automobile industry to expand the import of US rice as a bargaining chip.It is hoped that the US and Japan tariff negotiations can achieve results on the basis of ensuring Japan's national interests.

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