USD/JPY jumps as US-Japan trade talks set for Friday amid yen weakness

USD/JPY has surged 0.8% (95 pips) to 136.45 as the Japanese yen faces renewed selling pressure. The yen's weakness comes amidst expectations of US-Japan trade discussions scheduled for Friday, May 23. However, US Treasury Secretary Bessent is reportedly not planning to attend the meeting, potentially limiting the scope of any agreements. Japan's finance minister Kato hinted at intentions to discuss currency matters with Bessent this week, following Monday's working-level trade talks that yielded no changes to Japan's stance on eliminating US tariffs. USD/JPY now faces immediate resistance at 136.75, with a break above this level potentially accelerating gains towards 137.00. However, traders should monitor any comments from Japanese officials expressing concerns about rapid yen depreciation, which could limit USD/JPY's upside. Conversely, a lack of progress in trade negotiations might further pressure the yen.