TOKYO, Sept. 7, 2018 /PRNewswire/ - Oita Sumitomo Corporate analysts have recently commented saying that the Japanese Yen has posted considerable gains as it rallies to one week highs.
The U.S. has remained extremely focused in reducing its trade deficit by making a lot of drastic changes to its existing practices in place. The momentum of the Japanese Yen has since continued to rally in despite the negative news that the U.S. may target Japanese exports.
"Despite having a lot of media attention focusing on the issues regarding potential tariffs added to exports into the U.S., the Japanese Yen trading volumes on its futures did not change on previous trading sessions." said Matthew Andrews, Head of Corporate Trading at Oita Sumitomo Corporate.
New data showed that recent wage growth had not increased and remained flat, after an exciting result in June when figures showed a 3% increase, its average cash earnings came back down to 1.5% in July.
Towards the beginning of the financial year many financial economist had suggested and speculated that wage inflation would make the Bank of Japan reconsider its monetary policy.
"The Japanese Yen is not acknowledging the slow growth of its domestic GDP due to its healthy outlook for the US economy, which is Japanese largest export destination to date." Added Callum Price, Senior Vice President at Oita Sumitomo Corporate.
Japan's trade imbalance is currently the third biggest of all its major U.S. trading partners, which are just behind China and Mexico. The total figure amounts to $54 billion trade deficit, which is largely due to automobiles, and other parts that make up a third of the overall figure.
If the Japanese economy is hit with higher tariffs then it will make it extremely painful for automakers including Toyota, Honda and Nissan that makes a big percentage in the U.S. vehicle market.
U.S. and Japanese officials are set to hold a series of meetings towards the end of September at the U.N. General Assembly.