Dollar’s relief recovery shrinks, Tokyo seeks tariff deal

The USDJPY pair retreated to near 142.30 in European trading on Thursday after a relief recovery move seen in the last two trading days. The pair fell back as the DXY Dollar Index retraced after failing to extend its two-day recovery above the key level of 100.00.

The recovery move in the dollar has been shortened, even though Washington seems hopeful of a de-escalation in the trade war between the US and China. US Treasury Secretary Scott Bessent signaled on Wednesday that both nations could reduce additional tariffs imposed on each other mutually.

“I don’t think either side believes that the current tariff levels are sustainable, so I would not be surprised if they went down in a mutual way,” Bessent said.

Fears of an intense trade war between the world’s two largest powerhouses started ebbing after President Donald Trump expressed willingness to make a deal with Beijing.

“Discussions with Beijing are going well, and I think that we will reach a deal,” Trump said on Tuesday.

On the domestic front, investors await the US Durable Goods Orders data for March, as economists expect the Durable Goods Orders to have grown at a robust pace of 2%.

On the Tokyo front, investors look forward to Japan’s Economy Minister Ryosei Akazawa’s visit to Washington on April 30 for negotiations on tariffs.

Trade talks held last week between Tokyo and Washington didn’t turn out favorable for Japan, in which Akazawa asked the White House to review tariffs on automobiles and steel, according to the NHK report.

US officials indicated that they cannot give Japan preferential treatment.

(Source: OANDA)