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TOKYO (Reuters) – The dollar depreciated against the yen on Friday after a report suggested that Japan would be the next country with which US President Donald Trump would tackle trade issues.
FILE PHOTO: The US dollar and Japanese yen are visible in this image illustration 2 June 2017. REUTERS / Thomas White / Illustration
The US currency has maintained relatively tight ranges compared to other large companies such as the euro and the pound, as the market prepares for the much anticipated US jobs report due later in the session.
According to the CNBC television channel, President Trump hinted at a Wall Street Journal columnist that he could then discuss trade issues with Japan.
The US president has already challenged China, Mexico, Canada and the European Union on trade issues. He has repeatedly accused other countries of devaluing their currencies and putting the United States at a disadvantage.
The dollar extended losses overnight and traded for the last time at 110.57 yen for a loss of 0.17%.
"In addition to the dollar / yen, other currencies also fell against the yen. Although the real reasons for Trump's comments are not yet clear at this stage, the market has taken note of the possibility that Japan will be affected by a wider trade dispute, "said Shusuke Yamada, currency and equity strategist at Bank. of America Merrill Lynch.
Trump has already expressed dissatisfaction with the large US trade deficit with Japan. But so far, Washington has not asked Tokyo to take specific action to address the trade imbalance.
"The ongoing negotiations between NAFTA and Canada may not provide much support to Trump before the mid-term elections. Trade negotiations with China have made little progress and discussions on car rates with the European Union are long, "said Daisuke Karakama at Mizuho Bank.
"In such circumstances, it would not be surprising that Trump decided to focus on Japan."
Global trade concerns continued to weigh on the broader sentiment of risk, further supporting the yen as a safe haven.
The euro was down 0.2% at 128.39 yen and the pound lost 0.2% to 142.88 yen.
The Australian dollar lost 0.6 percent to 79.20 yen, slipping to a new 21-month low.
Against the greenback, the Aussie lost 0.5% to $ 0.7163, returning to its lowest level in two years at $ 0.7145 on Wednesday.
The currency, viewed as a barometer of broader risk sentiment, has been hit hard by the recent turmoil in emerging markets.
The uncertain economic outlook for China, Australia's largest trading partner, also weighed on the Aussie.
Asian stocks plummeted on Friday, with a public comment period for proposed US tariffs on an additional $ 200 billion worth of Chinese imports ending at 4:00 GMT.
Tariffs could come into force soon after, marking a sharp escalation of the ongoing trade conflict between the two largest economies in the world.
The dollar's index against a basket of six major currencies has changed little at 95.05 after losing about 0.2% on Thursday, breaking off a two-week peak in Tuesday's turmoil. emerging currencies.
The August report on non-farm payrolls in August is expected at 12:30 pm GMT. The US economy is expected to have created about 191,000 jobs in August, with average earnings at 0.2% mom, down from 0.3% in July.
The Federal Reserve is ready to raise interest rates this month, its third monetary tightening in 2018, and employment data should influence investors' short-term interest rate outlooks.
The euro was lower by 0.05% to 1.11617 dollar, gaining about 0.15% this week.
The pound stabilized at $ 1.2928 after rising 0.15% the day before. The pound was down 0.3% over the week.
The Chinese yuan was down 0.2% at 6.8410 in onshore trading.
Reportage by Shinichi Saoshiro; Edited by Eric Meijer & Shri Navaratnam
