Core Points - Japanese Prime Minister Shigeru Ishiba has pledged to increase national salary levels and aims for the economy to reach a total of $6.9 trillion by 2040 [1] - The commitment includes a target for nominal GDP to reach 1,000 trillion yen and an increase of average wages by 50% or more from current levels [1] - This announcement comes as Japanese voters prepare to evaluate Ishiba's performance as Prime Minister, following a significant defeat in the previous election [1]

Core Viewpoint - Citi Group anticipates a potential further decline in the US dollar as global leaders discuss exchange rate policies during the G7 meeting, with expectations that the US may not actively seek a weaker dollar but could see it depreciate as trade agreements are reached [1] Group 1: G7 Meeting and Currency Policy - The G7 meeting has brought exchange rate policy to the forefront, with discussions expected to include currency valuation as part of trade negotiations [1] - South Korean officials have indicated ongoing discussions with the US regarding currency issues, while Japan's finance minister is set to meet with US Treasury Secretary Yellen to address similar topics [1] Group 2: Implications for the Dollar - Citi's strategists speculate that the US may request other countries to appreciate their currencies as part of tariff reduction negotiations, with Japan and other East Asian nations likely targets [1] - The report suggests that the US Treasury Secretary will not pursue a comprehensive agreement like the 1985 Plaza Accord to weaken the dollar but will emphasize the role of central banks in exchange rate matters [1] Group 3: Market Reactions and Dollar Index - The US dollar index has declined by 4% since early April, coinciding with the announcement of high tariff policies that caused global market turmoil [2] - Ongoing uncertainty surrounding Trump's tariffs has led to skepticism about US policies, negatively impacting confidence in the dollar and other US assets [2]