- The EUR/JPY attracts some buyers about 171.45 in the early European session on Tuesday, rising 0.27% in the day.
- Hope that the EU concludes a Marco Commercial Agreement with the US this week to support the euro.
- Trump said he plans to impose 25% tariffs on Japan products, with effect as of August 1.
The EUR/JPY crossing extends its upward trend to around 171.45 during the early European session on Tuesday. The euro (EUR) is strengthened against Japanese Yen (JPY) amid hope for trade agreements between the United States and the European Union. The policy head of the European Central Bank (ECB), Joachim Nagel, is scheduled to speak later on Tuesday.
The EU hastened to conclude a preliminary commercial agreement with the US this week, which would allow it to set a tariff rate of 10% beyond the deadline of August 1 while negotiating a permanent agreement. The operators also react to reports that the US proposed an offer that would maintain the basic tariffs of 10% but would exempt sensitive industries such as alcoholic airplanes and drinks. This, in turn, provides some support to the common currency in the short term.
The Japanese currency collapses to a minimum of one year in front of the euro after the US president Donald Trump said that he plans to impose 25% tariffs on Japan products in the last development of his chaotic commercial war. Japanese Prime Minister Shigeru Ishiba said at the beginning of Tuesday that Japan has not been able to reach an agreement with the USA because the country continues to defend what needs to be defended.
“The Japanese government is expected to continue the tariff negotiations, but with the elections of the upper house scheduled for July 20, the possibility of reaching an agreement within the month seems high,” economists from Morgan Stanley Mufg Securities said.
Meanwhile, there is still a lot of uncertainty about the global economy. Any sign of renewed global commercial tensions or tariff uncertainty could boost safe refuge flows, supporting the JPY.
Tariffs – Frequently Questions
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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