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Reuters cites Japanese government officials with knowledge of the negotiations, as saying that hopes for a US-Japan trade deal in September are fading as both sides fail to make concessions on agriculture and automobiles.

It’s worth noting that Japanese Economy Minister Motegi and US Trade Representative (TR) Robert Lighthizer will hold two-day talks in Washington from Wednesday, which will be their second meeting this month.

Key Headlines:

Progress towards reaching a deal has been slow.

It will be a very tough negotiation.

If there is to be an ‘agreement’ we need to have something we can formally announce, which is tough.

It will be difficult to agree on a deal in September unless Washington makes more concessions.

A fallout on the upcoming US-Japan trade talks could temper the improved risk sentiment, with the safe-haven Yen likely to regain control on the 106 handle. However, the main focus remains on the FOMC July meeting’s minutes due later in the NA session.