Prime Minister Shinzo Abe's success in avoiding any clash over exchange rates with U.S. President Donald Trump at a summit meeting hasn't resolved underlying conflict, according to JPMorgan Chase & Co.
"We continue to think politics will be a main driver for dollar-yen this year," Tohru Sasaki, head of Japan markets research at JPMorgan in Tokyo, wrote in a report Monday. "Japan will soon realize that the peaceful weekend in Florida is over and face reality. The U.S.'s protectionism would create downward pressure on the dollar against funding currencies."
The yen tumbled in the initial response to the Trump-Abe meetings, where the two leaders delegated the task of overseeing economic dialogue to the vice president and deputy prime minister.