SINGAPORE — The dollar traded in a tight range on Tuesday after a brief fall at the start of the week, as investors watched out for any progress on trade talks ahead of an August 1 deadline for countries to strike deals with the US or face steep tariffs.
The yen mostly held to gains from the previous session following results from a weekend upper house election in Japan that proved no worse than what had already been priced in, as focus now turns to how quickly Tokyo can strike a trade deal with Washington and Prime Minister Shigeru Ishiba’s future at the helm.
The Japanese currency was last a touch weaker at 147.65 in early Asia trade, after rising 1 percent on Monday in the wake of the election outcome.
The bruising defeat suffered by Ishiba and his ruling coalition also drew just a modest response in the broader Japanese market, which returned from a holiday in the previous session. JP/.T
“The initial relief for the yen that the ruling coalition did not lose even more seats and that Prime Minister Ishiba plans to hang on to power is likely to prove short-lived,” said MUFG senior currency analyst Lee Hardman.
“The pick-up in political uncertainty in Japan could complicate reaching a timely trade deal with the US, posing downside risks for Japan’s economy and the yen.”
With just slightly over a week to go before an August 1 deadline on tariffs, US Treasury Secretary Scott Bessent said on Monday that the administration is more concerned with the quality of trade agreements than their timing.
Asked whether the deadline could be extended for countries engaged in productive talks with Washington, Bessent said President Donald Trump would make that decision.
