- The EUR/JPY collapses about 161.00 while the euro falls after Trump’s threat to impose 50% tariffs on EU imports.
- The ECB is sure that interest rates will lower the June meeting.
- Japan National CPI data for April increases bets of a more aggressive box.
The EUR/JPY torque slides about 161.00 during the American session on Friday, the lowest level seen in a month. The torque falls as the euro (EUR) weakens after the president of the United States (USA), Donald Trump, threatened to impose 50% tariffs on the imports of the European Union (EU) in a publication in Truth.Social during the last negotiation hours in Europe, after Brussels sent a commercial proposal not very favorable to Washington.
“Our discussions with them do not go anywhere! Therefore, I am recommending a direct tariff of 50% to the European Union, as of June 1, 2025. There is no tariff if the product is built or manufactured in the United States. Thank you for your attention to this matter!” Trump said.
A new escalation in commercial tensions between economies has led to a strong decrease in the demand for the euro (EUR). The impact of commercial problems between the US and the EU would be significant for the main currency, since the goods exported by the EU in 2024 were almost double what imported from the US, according to the US trade representative’s office.
Meanwhile, US Treasury Secretary Scott Besent has also warned in an interview with Fox News that the EU “is not negotiating in good faith.”
In addition, the greatest hope that the European Central Bank (ECB) reduces interest rates at the June policy meeting have also weighed on the euro.
In the front of Tokyo, the Japanese Yen (JPY) surpasses most of his peers, except the antipodeans, due to the data of the National Consumer Price Index (CPI) of Japan for April, which were published earlier in the day. According to the CPI, inflation data, excluding fresh foods, increased at a faster rate of 3.6%, compared to estimates of 3.4%and March reading 3.2%.
And in Japanese price today
The lower table shows the rate of change of Japanese Yen (JPY) compared to the main currencies today. Yen Japanese was the strongest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.46% | -0.51% | -0.90% | -0.62% | -0.90% | -1.18% | -0.83% | |
| EUR | 0.46% | -0.05% | -0.42% | -0.16% | -0.44% | -0.72% | -0.36% | |
| GBP | 0.51% | 0.05% | -0.38% | -0.11% | -0.36% | -0.67% | -0.31% | |
| JPY | 0.90% | 0.42% | 0.38% | 0.28% | -0.03% | -0.30% | 0.06% | |
| CAD | 0.62% | 0.16% | 0.11% | -0.28% | -0.31% | -0.56% | -0.20% | |
| Aud | 0.90% | 0.44% | 0.36% | 0.03% | 0.31% | -0.27% | 0.08% | |
| NZD | 1.18% | 0.72% | 0.67% | 0.30% | 0.56% | 0.27% | 0.35% | |
| CHF | 0.83% | 0.36% | 0.31% | -0.06% | 0.20% | -0.08% | -0.35% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Japanese yen from the left column and move along the horizontal line to the US dollar, the percentage change shown in the picture will represent the JPY (base)/USD (quotation).
Japanese CPI data has increased confidence among market experts that the Bank of Japan (BOJ) could raise interest rates at the July meeting.
Ing analysts said in a note: “The highest Japanese consumer inflation than expected, especially underlying inflation reaching a maximum of more than two years, should increase the chances of a rise in BOJ rates in July.”
Euro Faqs
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
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.
