USD/JPY extends losses to 143.70 amid broad-based Dollar weakness

• The US Dollar accelerates its decline on risk-off markets to hit weekly lows at 143.70.
  Trump's tariff threats and hopes of further Fed easing are weighing on the USD.
• Japanese Prime Minister Ishiba said that they are far from. a trade deal with the US.

US Dollar is among the weakest G8 currencies on Thursday. The risk-averse sentiment triggered by a fresh tariff threat by US President Trump, coupled with higher hopes of Fed cuts, is pushing the USD lower against the safe-haven Japanese Yen.

US CPI figures released on Wednesday revealed that inflation grew at a 0.1% pace in May and 2.4% year-on-year, below the 0.2% and 2.5% respective increases forecasted by market analysts.

These figures have eased concerns about the inflationary impact of Trump's "Liberation Day" tariffs and boosted hopes that the Fed might cut interest rates again in September. The CME Fed Watch tool shows a nearly 60% chance of a 25 bps cut after the summer, up from 50% last week.

Trump's tariff threat has rattled markets

Earlier today, US President Trump announced that he will send letters to all trading partners specifying a set of demands that they will have to accept if they want to avoid higher tariffs from July 9. The threat boosted risk aversion and provided a fresh impulse to the Yen.

In Japan, Prime Minister Ishiba observed that they significant differences in the way of a trade agreement with the US and affirmed that he is not pursuing a particular timeline to reach a deal. 

Somewhat later, Japan's Chief Trade negotiator, Ryosei Akazawa, said that he is not aware of any discussions on US Treasuries and that any negotiation on that topic will be led by Finance Minister Kato.