- The EUR/JPY depreciates as Japanese cuts his daily losses.
- Japanese finance minister Katsunobu Kato said he will carry out an adequate fiscal policy to attract national investors.
- The ECB reviewed its inflation projections by 2025 and 2026, noting that its current flexibility cycle is close to concluding.
The EUR/JPY retreated a new seven months of 165.45, quoting around 165.10 during the Asian hours on Tuesday. However, the currency crossing gained ground as the Japanese Yen (JPY), considered safe refuge, received down pressure in the middle of a deceleration of the latest tariff tensions between the United States (USA. UU.) And China.
The US and China advisors are scheduled to continue meeting for the second day at 10:00 am in London. Commercial conversations will continue while the two largest economies in the world seek to relieve tensions about sending technology and rare earth elements, according to Bloomberg. The Secretary of the Treasury, Scott Besent, and the Secretary of Commerce, Howard Lutnick, both made positive comments on the meeting held on Monday.
On Monday, the data showed that Japan’s economy contracted at a slower pace than initially estimated, in 0.2% annualized during the first quarter of 2025, reaffirming the market bets that the Bank of Japan (Boj) will continue to normalize the rates in the middle of persistent inflation.
Japanese finance minister Katsunobu Kato said Tuesday that he will carry out an appropriate fiscal policy to encourage national investors to buy more bond holdings from the Japanese government. Kato also emphasized that the government must make efforts to ensure that a variety of investors buy and have government bonds, at a time when the BOJ reduces its bond purchases.
In the Eurozone, the European Central Bank (ECB) made a rate of 25 basic points last week, carrying the indebtedness costs at its lowest level since November 2022. In addition, the Central Bank also reviewed its inflation projections by 2025 and 2026, indicating that it is close to the end of its current flexibility cycle.
FAQS tariffs
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.
