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Triggers for yen's appreciation lurk in bilateral talks

Trade, monetary policy are potential flashpoints for US-Japan dialogue

TOKYO -- U.S. eagerness to reduce its trade deficit with Japan could produce a hard-line American stance at the bilateral economic dialogue beginning Tuesday that leads the yen to strengthen, despite Tokyo's efforts to minimize that possibility.

Trade frameworks will be one focus of the dialogue. Washington may push Tokyo to boost imports from the U.S. in specific areas such as farm products and automobiles. If negotiations stall, the American side may ratchet up criticism of a weak Japanese currency in a bluff to elicit concessions. Such speculation pervading the market could enhance yen-buying pressure.

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