- The EUR/JPY goes back after marking a daily maximum of 172.28 on Wednesday.
- The Japanese and safe refuge yen gains ground due to renewed commercial concerns.
- The EU Commissioner, Maros Sefcovic, said that significant progress had been made towards a commercial framework with the US.
The EUR/JPY continues its deterioration per second consecutive session after retreating a maximum of one year of 172.28, reached Wednesday. The currency crossing is quoted around 171.40 during Thursday’s Asian hours.
The EUR/JPY crossing depreciates as Japanese (JPY) receives support from the demand for safe refuge, driven by renewed commercial concerns. The president of the USA, Donald Trump, presented a new wave of tariff demand letters on Wednesday, which generated concerns about a renewed global commercial war. These letters delineate individual tariff rates that range between 20% and 50% for eight countries as of August 1. In addition, Trump has announced a new 50% tariff on US copper imports, which will enter into force on August 1, according to Reuters.
However, Japanese (JPY) can face difficulties since commercial negotiations between the United States (USA) and Japan showed signs of tension, particularly on the protections of the rice market in Japan. This follows the announcement of the US president, Donald Trump, of a 25% tariff on Japanese products, effective as of August 1.
Japan is pressing for tariff negotiations at the ministerial level with the United States (USA) before the deadline of August 1. Tokyo seeks to establish conversations between his chief negotiator, Ryosei Akazawa, and US Treasury Secretary, Scott Besent, at the World Exhibition on July 19. Japan is also looking to organize a preliminary and potentially and potential telephone call between Prime Minister Iliba and Secretary Besent.
On Wednesday, the Chief of Commerce of the European Union (EU), Maros Sefcovic, declared that a “good progress” had been achieved towards a commercial framework with the US, suggesting that an agreement could be achieved “potentially even in the coming days.” He also stressed that the extended deadline offers additional time to conclude negotiations. However, Italian Economy Minister Giancarlo Giorgetti warned that conversations remain “very complicated” and could extend until the last moment.
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.
