Ryosei Akazawa meets with Trump during stalled US-Japan trade talks after giving him a hat
by VT Markets
/
Jul 23, 2025
Japan’s top tariff negotiator, Ryosei Akazawa, met with Trump on Tuesday. Currently, trade talks between the U.S. and Japan are stuck, and this meeting could help move things forward.
In a previous meeting, Trump gave Akazawa a hat. These discussions show a commitment to resolving ongoing trade issues between the two countries.
Market Outlook
With the trade talks still at a standstill after the meeting with Akazawa, we expect uncertainty to take center stage. This could lead to increased market volatility, especially in currency and stock markets linked to Japan. Traders should get ready for significant price swings driven by news in the coming weeks.
In the past, trade tensions have often boosted the Japanese yen as investors turn to it for safety. We noticed the USD/JPY pair dropped sharply during tensions in 2019, and we think this could happen again. Therefore, taking long positions on the yen or buying put options on the dollar could be smart moves if talks stall further.
The Nikkei 225 index is especially at risk since it includes many major exporters that depend on the U.S. market. Auto manufacturers are particularly vulnerable, as Japan sent over 1.7 million cars to the U.S. last year. The possible return of tariffs from the former president remains a big worry. Thus, we’re looking at protective put options on broad Japanese market ETFs like the EWJ.
Volatility Watch
We’re keeping a close eye on volatility indexes like the Cboe Nikkei 225 Volatility Index (JNIV), which can jump in response to negative news. If either side uses harsh language following this recent meeting, it may create a chance to buy volatility. This could be a good hedge against long equity positions or an opportunity for a speculative trade based on continued disagreements.
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by VT Markets
Jul 23, 2025
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