Currency traders focused on Wednesday on the yen, which see-sawed as they weighed speculation about the future of Japanese Prime Minister Shigeru Ishiba against U.S. President Donald Trump's announcement of a trade deal with Japan.

A deal with Japan and a potential deal with Europe follow months of uncertainty and will likely raise prices while offering a bit of clarity for global trade.

Japan is facing trade and political uncertainty after a historic defeat for the prime minister’s ruling party. Shigeru Ishiba is trying to buy time for his premiership following this past weekend’s election, which left the ruling bloc three seats short of a majority in the upper house.

The U.S. dollar strengthened against the Swiss franc and euro but weakened versus the yen on Wednesday as positive sentiment from a new U.S. trade deal was offset by political uncertainty surrounding Japanese Prime Minister Shigeru Ishiba's future.

While the announcement was cause for optimism ahead of Aug. 1, analysts remained concerned about the steep tariffs still looming for key trading partners such as Brazil and the EU.

Bank of Japan Deputy Governor Shinichi Uchida said Wednesday that a tariff deal between Japan and the United States is a