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    A Japanese trade negotiator stays silent on the proposed $550 billion US investment package.

    by VT Markets
    /
    Aug 26, 2025
    Japan’s trade negotiator, Ryosei Akazawa, did not comment on the rumors of a $550 billion investment heading to the US. He did mention plans to push for lower US tariffs on Japanese products. Howard Lutnick had previously stated that an agreement involving this $550 billion investment, which relates to Donald Trump’s administration, would be announced soon. However, details about Japan’s government-backed loans and guarantees in the US are still unclear.

    Washington Visit

    Akazawa is expected to visit Washington to finalize the trade agreement. This deal could involve the US placing a 15% tariff on Japanese goods, while Japan might promise the investment. However, Japan has not confirmed this arrangement yet. Japan’s official “no comment” on the potential $550 billion investment raises doubts about the rumored deal. This uncertainty is significant for the USD/JPY currency pair, which has seen its one-month implied volatility spike to over 11% this week. We should brace for a sharp movement if the investment is confirmed or denied. Japanese exporters, especially in the automotive sector, feel the pressure from the potential 15% US tariffs. These specific stocks were affected during the trade conflicts of 2018-2019. Since auto exports to the US made up over 35% of Japan’s total vehicle exports last year, the implications are serious. Buying put options on an index of Japanese automakers might be a good way to protect against failed negotiations.

    Market Strategy

    Given the mixed signals, a clear strategy is to trade on the expected increase in volatility. The market appears anxious, with the Nikkei Volatility Index rising above 19 in recent sessions. We believe that setting up long strangles or straddles on major indices like the Nikkei 225 or the S&P 500 could be a smart move to benefit from a major market shift in either direction once we gain clarity. Create your live VT Markets account and start trading now.

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