Yen Strengthens as Markets React to Trump’s Tariff Plans

The Japanese yen firmed on Thursday, reaching a two-month high of 150.62 per U.S. dollar, as investors sought safe-haven assets amid concerns over U.S. President Donald Trump’s tariff agenda. The dollar held steady, while the euro and sterling eased, with the British pound slipping to $1.2594.

Trump announced upcoming tariffs on timber, cars, semiconductors, and pharmaceuticals, echoing previous remarks about imposing a 25% tariff on autos and similar duties on other sectors. Investors remain cautious about the potential economic impact, though markets have grown accustomed to his transactional approach. Meanwhile, Trump also pledged tax cuts for individuals and businesses, adding to market uncertainty.

Federal Reserve minutes revealed officials’ concerns about inflation risks tied to Trump’s trade and immigration policies, reinforcing a patient stance on rate cuts. The dollar index hovered near a one-week high at 107.15.

In the Asia-Pacific region, the Australian dollar edged up 0.07% to $0.6350 after a mixed jobs report, while the New Zealand dollar remained flat at $0.5705. Reserve Bank of New Zealand Governor Adrian Orr stated that another 50-basis-point rate cut would require a significant economic shock.

China left its benchmark lending rates unchanged, prioritizing financial and currency stability. The offshore yuan gained 0.1% to 7.2788 per dollar.

Geopolitical tensions also influenced market sentiment after Trump referred to Ukrainian President Volodymyr Zelenskiy as a “dictator” amid ongoing Russia-Ukraine negotiations. Investors remain watchful as uncertainty looms over global trade, central bank policies, and geopolitical developments.