The dollar held losses against the yen on Wednesday after U.S. President Donald Trump announced a trade deal with Japan ahead of an impending tariff deadline.

Trump said the agreement will result in Japan investing $550 billion into the United States and a tariff rate of 15% was set on U.S. imports from Japan.

With an August 1 deadline looming before the imposition of sweeping import duties on trade partners, U.S. Treasury Secretary Scott Bessent said on Monday the administration is more concerned with the quality of trade agreements than the timing.

Asked whether the deadline could be extended for countries engaged in productive talks with Washington, Bessent said Trump would make that decision.

Uncertainty over the eventual state of tariffs globally has been a huge overhang for the foreign exchange market, leaving currencies trading in a tight range for the most part, even as stocks on Wall Street have scaled fresh highs.

The dollar index was down 0.4% to 97.423. The greenback traded at 146.65 yen, little changed from the previous session when it slid 0.5%.

In a post on Truth Social, Trump said Japan would open to trade for U.S. cars, trucks, rice and certain agricultural products, among other items.

Trump's announcement follows a meeting with Japan's top tariff negotiator, Ryosei Akazawa, at the White House on Tuesday, according the Asahi newspaper.

The euro stood at $1.1745, down 0.1% so far in Asia. Sterling was little changed at $1.35285.

The Australian dollar fetched $0.65555, flat in early trade. New Zealand's kiwi dollar traded at $0.6007, up 0.07%.

Also weighing on investors' minds were worries about Federal Reserve independence, given Trump has repeatedly railed against Chair Jerome Powell and urged him to resign because of the central bank's reluctance to cut interest rates.

Bessent on Monday took a softer stance, saying there is no need for Powell to step down immediately, adding that he should see through the end of his term in May if he wants.

Source: Investing.com