- The USD/JPY yields initial profits and falls about 145.00 amid the uncertainty about Trump’s tariff policy.
- The US Court accused Trump of exceeding the president’s authority by facilitating his tariff agenda.
- The commercial negotiator of Japan, Akazawa, prepares to visit Washington for the fourth round of commercial negotiations.
The USD/JPY pair goes back to about 144.90 during the European negotiation hours on Thursday after facing strong resistance above 146.00. The torque gives an early earnings as the US dollar went back after investors reassess the consequences of the United States Court decision (USA) to cancel the tariff policy of President Donald Trump. However, the White House has appealed the decision.
The US dollar index (DXY), which tracks the value of the dollar against six main currencies, loses early profits and stabilizes around 99.90.
On Wednesday, the US Court of International Trade accused Trump to exceed his authority to comply with his tariff agenda. The Court declared that Trump has violated the constitutional limit by exercising a national emergency under the International Emergency Emergency Powers Law (IEEPA) to correct commercial imbalances. According to a report by the Associated Press (AP), prolonged commercial deficits do not constitute a sudden emergency.
The event is expected to affect business confidence, since the owners began to develop acquisition and production strategies, assuming that tariffs will be persistent. Trump’s intention to impose tariffs on his business partners also aimed to boost manufacturing capabilities nationwide.
Meanwhile, investors also look for signs about whether the White House will continue to negotiate trade agreements with its commercial partners.
The commercial negotiator of Japan and Minister of Economy, Ryosei Akazawa, declared earlier on the day he will carry out ministerial conversations about commercial expansion and cooperation in economic security, and will visit Washington for the fourth round of commercial negotiations despite being “aware of the reports on the decision,” said Bloomberg. Akazawa refused to comment on the impact of the cancellation of Trump’s tariffs by the US court in the “Japan-EE.U.” Negotiations. ” And he said: “We [la administración] We intend to thoroughly examine the content of the decision and its implications and respond appropriately. “
US dollar FAQS
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.
