The United States worried about its trade deficit / Japan worried about its fiscal deficit!
The US Republican candidate is placing reducing the trade deficit at the center of economic policy, signaling plans to raise tariffs on trading partners and to induce a weaker dollar to cut the deficit. Meanwhile, the Japanese government has not shifted from its cautious stance on fiscal stimulus despite the economic slowdown, making it difficult to spur the economy. This explains the impact that differences in US and Japan economic and fiscal policy approaches have on the dollar-yen market.
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