- The EUR/JPY weakens as Japanese gains strength, driven by the demand for investors for shelter assets amid the growing global commercial tension.
- The US Treasury Secretary, Scott Besent, said that formal commercial negotiations with Japan have not yet begun.
- Japanese finance minister Katsunobu Kato criticized US tariffs at the G7 summit, describing them as “highly disappointing.”
The EUR/JPY retreats its recent profits recorded in the previous session, quoting around 161.90 during the Asian hours of Thursday. The crossing of currencies is depreciated as Japanese (JPY) strengthens, since investors are aimed at shelter assets amid renewed concerns about global commercial tensions.
The US Treasury Secretary, Scott Besent, minimized hopes of progress in commercial negotiations between the US and Japan, stating that formal commercial conversations have not begun and that unilateral tariff cuts have not been proposed. Adding to the cautious feeling, the US informed the commercial delegation of Japan that Tokyo would not receive preferential treatment under the current tariff framework, despite the calls for a policy review.
The last report of the Bank of Japan Bank (BOJ), published on Wednesday, said general financial stability but emphasized the need for surveillance due to the risks linked to market fluctuations, especially those related to shares of shares by Japanese banks.
Japanese Minister of Finance, Katsunobu Kato, criticized US tariffs at the G7 meeting, qualifying them as “highly disappointing.” Kato emphasized the importance of a free trade regime and said that exchange rates should be determined by markets, warning that excessive movements in the currency market could damage the economy.
Meanwhile, the president of the European Central Bank (ECB), Christine Lagarde, expressed concern about the increase in US tariffs on EU assets – 3% to 13% – pointing out its negative impact on European perspectives. The Governing Council member of the ECB, Madis Muller, also suggested that interest rate cuts could be necessary if commercial tensions further affect growth. These moderate comments could press the euro in the short term.
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.
