- The USD/JPY moves up at about 146.30 amid the low general performance of Japanese yen.
- The president of the United States threatens to impose 25% tariffs on imports from Japan and South Korea.
- Operators are likely to reduce the hard line bets of the BOJ since Japan fails to close an agreement with the US during the tariff extension period.
The USD/JPY pair rises to about 146.30 during the European negotiation session on Tuesday. The torque gains ground while the Japanese Yen (JPY) does not yield as expected, after the announcement of 25% reciprocal tariffs by the president of the United States (USA), Donald Trump, on the imports of Japan.
And in Japanese price today
The lower table shows the rate of change of Japanese Yen (JPY) compared to the main currencies today. The Japanese Yen was the weakest currency against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.11% | 0.19% | 0.22% | -0.20% | -0.71% | -0.23% | -0.11% | |
| EUR | 0.11% | 0.31% | 0.36% | -0.08% | -0.61% | -0.11% | 0.00% | |
| GBP | -0.19% | -0.31% | 0.06% | -0.39% | -0.92% | -0.42% | -0.30% | |
| JPY | -0.22% | -0.36% | -0.06% | -0.43% | -0.94% | -0.41% | -0.23% | |
| CAD | 0.20% | 0.08% | 0.39% | 0.43% | -0.54% | -0.03% | 0.10% | |
| Aud | 0.71% | 0.61% | 0.92% | 0.94% | 0.54% | 0.51% | 0.63% | |
| NZD | 0.23% | 0.11% | 0.42% | 0.41% | 0.03% | -0.51% | 0.12% | |
| CHF | 0.11% | -0.00% | 0.30% | 0.23% | -0.10% | -0.63% | -0.12% |
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).
On Monday, US President Trump presented new tariff rates for 14 countries that failed to sign a commercial pact with Washington during the 90 -day tariff pause. Among them, the 25% tariff stands out to Japan and South Korea, which are key commercial partners of Washington.
The imposition of additional import rights to Japan by the USA despite the long trade negotiations between the nations has put the Japanese Yen in an unfavorable position.
In addition, the US president has also threatened to increase tariffs if countries respond with reprisals.
The failure of the commercial agreement between the US and Japan during the 90 -day pause period has put in danger the market expectations that the Bank of Japan (BOJ) could increase the interest rates again.
Meanwhile, the announcement of reciprocal tariffs by Donald Trump has also weighed over the US dollar. The dollar index (DXY), which tracks the value of the dollar against six main currencies, corrects about 97.35 from the weekly 97.67 registered on Monday.
Investors expect tariff policy to be inflationary for the US economy, since the impact of higher tariffs will be assumed by national importers, who will transfer them to final consumers. This scenario would restrict the Federal Reserve (FED) to undo the restrictivity of monetary policy.
US Dollar – Frequently Questions
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
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.
