FX.co ★ Yen Tumbles as US and China Lower Tariffs

The Japanese yen experienced a significant decline, reaching nearly 148 per dollar on Monday, marking a one-month low. This weakness is attributed to a decrease in demand for safe-haven assets after the U.S. and China made headway in their trade talks. Over the weekend in Switzerland, both nations agreed to substantially lower tariffs, which marks a major step towards resolving their prolonged trade conflict. Under the initial agreement, U.S. tariffs on Chinese imports will decrease from 145% to 30%, while China will cut tariffs on U.S. goods from 125% to 10%. Despite these developments, U.S. Commerce Secretary Howard Lutnick indicated that the 10% baseline tariff on products from other countries is expected to "stay in place for the foreseeable future." Additionally, investors kept a close watch on the ongoing trade discussions between the U.S. and Japan, as Tokyo aims to reach a potential agreement by June. Domestically, Japan reported a current account surplus of JPY 3.45 trillion in March, which follows a record surplus of JPY 4.06 trillion in February.