Japan Seeks to Renegotiate Tariffs.

The Japanese yen has continued to strengthen, reaching its highest level in six months this month, as the escalating trade war between the United States and China has prompted investors to seek the yen as a safe haven. Meanwhile, China announced plans to raise tariffs on imports from the U.S. by another 84%, bringing the total to 104%. At the same time, reports have emerged that Japan is sending a diplomatic delegation to negotiate trade matters with the United States. Prime Minister Shigeru Ishiba revealed that he had contacted President Trump via phone to request a reconsideration of the import tariff policies.

The International Monetary Fund (IMF) expressed confidence that Japan is on track to achieve the Bank of Japan’s 2% inflation target. The IMF stated that after decades of deflation, Japan's economy is beginning to show signs of entering a new equilibrium, forecasting a growth rate of 0.5% and inflation at 2%. However, the IMF also noted risks to growth, citing concerns over the global economic slowdown and still-weak domestic consumption. Meanwhile, Japan’s general inflation rate stands at 3.7%, largely driven by higher food costs, which have had a direct impact on households. However, if the global economy grows as expected, Japan's economy could expand by 1.2% in 2025, with inflation easing to 2.4%.

Prime Minister Shigeru Ishiba announced plans to meet President Donald Trump, intending to request a reconsideration of the 24% tariff imposed on Japanese goods. Currently, tariffs on automobile imports stand as high as 25%. These tariffs have significant implications for Japan’s export-driven economy. U.S. Treasury Secretary Scott Bessent plans to meet with Japanese officials soon to discuss tariffs specifically. However, analysts warn that increasing tariffs could reduce Japan’s GDP growth to just 0.8%. Nevertheless, a 90-day postponement of the tariff hikes has somewhat alleviated the immediate burden.

The Bank of Japan is expected to raise its policy interest rate and continue adjusting its monetary policy. Economic and interest rate trends are reported to be improving. In its March report, the Bank of Japan emphasized the necessity of flexible and data-driven decision-making, taking into account current economic conditions and associated risks. Tariff issues could pose a threat to the economy, prompting the central bank to adopt a more cautious approach toward interest rate hikes.

Japan’s manufacturing PMI rose to 48.4 in March, down from 49 in the previous month, marking the ninth consecutive month of contraction in the manufacturing sector. The decline in manufacturing activity was pressured by slower production capacity and new orders due to reduced domestic and international demand. In response, companies have been forced to sharply reduce purchasing activities and rely on existing inventories. Despite weaker output and demand outlooks, companies continued to increase employment levels.

Techical analysis data (5H)

Resistance: 145.3, 146.14, 146.85

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 143.04 - 143.75 but cannot break the support at 143.75, you may set a TP at approximately 146.14 and SL at around 142.2 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 145.3 - 146.14, you may set a TP at approximately 146.85 and SL at around 143.04 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 145.3 - 146.14 but cannot break the resistance at 145.3, you may set a TP at approximately 143.04 and SL at around 146.85 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 143.04 - 143.75, you may set a TP at approximately 142.2 and SL at around 146.14 or according to your acceptable risk.

Pivot point April 10, 2025 10:35 PM. GMT+7