- The EUR/JPY yields a large part of the profits of the Asian session, although the fall seems limited.
- The hopes of a commercial agreement between the US and Japan and the expectations of uploads of the BOJ underprate the JPY, limiting the crossing.
- The impulse in favor of the risk acts as a wind against for the Seguro JPy shelter and could support cash prices.
The EUR/JPY crossing fights to capitalize on its modest profits from the Asian session and attracts some intra -sellers in the vicinity of the 162.00 media on Wednesday. Cash prices go back to the lower end of the daily range, around the 161.80-161.75 area in the last hour, stopping the night rebound from levels below 161.00 or a minimum of almost two weeks.
Despite the mixed data of the PMI of Japan, the hopes that Japan achieves a commercial agreement with the US, along with the expectations that the Bank of Japan (BOJ) will continue to raise interest rates, underpin the Japanese yen (JPY) and limit the EUR/JPY crossing. In fact, the reports indicated that the BOJ plans to point out the next week that there is almost no need to change its basic position on the increase in interest rates, since the impact of US tariffs will not interrupt the continuous cycle of salary growth and inflation.
This marks a great divergence compared to the DOVISH decision of the European Central Bank (ECB) last week, which together with a modest rebound of the US dollar (USD), is considered to weigh on the shared currency and acts as a wind against for the EUR/JPY crossing. The ECB reduced interest rates for the seventh time in a year last Thursday and warned that economic growth will suffer a great blow to US tariffs. This, in turn, reinforced the case for greater flexibility of politics by the ECB in the coming months.
Meanwhile, optimism fed by the decrease in commercial tensions between the US and China continues to support the impulse in favor of the risk. This could stop the operators to carry out aggressive bullish bets around the Insurance JPY shelter and provide some support to the EUR/JPY crossing. Even from a technical perspective, the price action within the range observed during the last two weeks justifies a certain caution before positioning for a firm direction in the short term. The operators now expect the preliminary PMISs of the Eurozone for a new impulse.
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.
