Yen’s performance fluctuates between US trade deal and uncertainty over Prime Minister’s future

Financial markets witnessed volatility in the Japanese yen’s performance on Wednesday, as traders faced a complex mix of conflicting news, including the US announcement of a trade agreement with Japan and growing speculation about the future of Japanese Prime Minister Shigeru Ishiba amid domestic political pressures.

The yen initially rose to its highest level since July 11, reaching 146.20 yen against the US dollar, supported by positive news about the trade deal, which would reduce tariffs on Japanese auto imports and protect Tokyo from additional punitive duties.

However, the gains quickly faded after media reports circulated that Ishiba intends to resign next month following his government’s defeat in the upper house elections. Ishiba quickly denied the reports, describing them as “baseless,” which helped the yen pare its losses to settle at 146.83 yen to the dollar in today’s trading.