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    Japan’s chief trade negotiator Akazawa is returning to the US to discuss Japanese investments.

    by VT Markets
    /
    Aug 27, 2025
    Japan’s chief trade negotiator, Akazawa, will visit the United States on Thursday. This trip will focus on discussions about Japanese investment in the US, according to Asahi TV. The goal is to strengthen economic ties between the two countries. However, they have not shared specific details about which sectors will be involved or any financial figures.

    US Dollar and Yen Dynamics

    With talks centered on Japanese investment in the US, we can expect a rise in demand for the US dollar against the yen. This supports a positive trend for USD/JPY, especially since Japanese foreign direct investment in the US hit a record of over $750 billion in 2024. These upcoming discussions could maintain this strong capital flow. Investors may want to consider taking long positions in USD/JPY, possibly through call options. Options set to expire in the next few weeks with strike prices above 170.00 seem appealing, especially since the pair has recently been stable around 168.00. The rise in implied volatility to 12% for one-month contracts indicates that the market is anticipating significant movement after the talks. A weaker yen could benefit Japanese stocks, particularly major exporters. We expect potential gains in the Nikkei 225 because a lower currency increases the value of foreign earnings. This outlook is backed by earnings reports from the last quarter of 2024, where exporters frequently exceeded forecasts due to currency fluctuations.

    Possible Risks and Considerations

    It’s important to keep an eye on the risk of intervention from Japan’s Ministry of Finance. For instance, in late 2024, when the yen fell below 160, swift actions were taken to support the currency. Any news indicating official concern may be a good opportunity to take profits on long USD/JPY positions. Create your live VT Markets account and start trading now.

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