Japanese carmakers have largely absorbed the cost of US President Donald Trump’s tariffs on auto imports, a move that may undermine the Asian nation’s negotiating power ahead of a July 9 deadline that will see duties rocket even higher.

Donald Trump has threatened to increase levies on Japan and cast doubt that the US will reach a deal with its Asian ally, as he escalated his trade rhetoric days before his pause on some steep tariffs is set to expire.

Federal Reserve Chief Jerome Powell said it is premature to lower interest rates, citing the potential impact of tariffs.

U.S. Federal Reserve Chair Jerome Powell on Tuesday reiterated the U.S. central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates, again setting aside President Donald Trump's demands for immediate and deep rate cuts.