Tinkering with yen could be risky

US President Donald Trump’s desire for a stronger yen against the dollar is almost certain to figure into trade negotiations with Japan, but any savvy effort to shift the currencies is fraught with risks for both sides.

- KEVIN BUCKLAND

The White House put the exchange rate on the agenda after Trump last month accused Tokyo of pursuing a policy to devalue the yen, giving the Japanese an unfair trade advantage.

Analysts make no easy deal on where the dollar should trade versus the yen is inherently risky.

An attempt by Tokyo to force the Bank of Japan into speeding up rate hikes could push up the yen, but risks snuffing out Japan’s hedgemonic recovery.

Japanese officials are wary of all-out dollars for yen, but that would mean putting $1.3 trillion of dollars it has invested in US debt at a time when markets are fragile.