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Yen Tumbles On Trump, Kuroda Comments As Japan Comes Back From Long Weekend

Amid President Trump's visit, Abe's calls for more sanction and general militarization, the Japanese came back from their long weekend and decided it was time to panic-sell JPY in favor of the dollar the open. The yen slumped as much as 0.6% moments ago to an 8-month low against the dollar...

... for two parallel reasons: first, Trump complained about the US-Japan trade relationship while in Tokyo for the first stop of his tour of the region. Trump was speaking to business leaders in Tokyo and said that US trade with Japan is "not fair” and isn’t open. He said it’s “not free and not reciprocal” and that the Trans-Pacific Partnership “was not the right idea”. Trump also complained that the US had experienced “massive trade deficits” with Japan.

Following the comments, the USDJPY jumped as much as ¥114.73 per dollar, the weakest level for the Yen since March 15, before exporters started selling dollars, according to an Asia-based FX trader.

An additional driver of the weakness in JPY was a speech by BOJ Governor Kuroda meant to further weaken the Yen - and which ironically came as Trump was indirectly bashing the weak Japanese currency - who confirmed the BoJ will continue with powerful easing, saying that "there’s still a long way to getting to the 2% inflation target" and added that it is "crucial for people to actually experience inflation above 2%."

Stock futures initially kneejerked higher with them but quickly reversed it all...

TSY yields - with which USDJPY has a high correlation - are also ticking higher, and as Citi concludes, the "JPY seems to be under attack from all sides - BoJ, Trump, Treasuries."