- The Japanese Yen (JPY) rises for a second day
- Safe haven demand jumps after Trump’s trade tariffs
- The US Dollar (USD) is falls against its major peers
- US recession fears grow
The US dollar against the Japanese yen (USD/JPY) exchange rate is falling for a second day. The pair fell 0.23% in the previous session, settling on Tuesday at 149.61. At 22:00 UTC, USD/JPY trades -0.43% lower at 148.96 and is in a range of 148.72 to 150.49.
The safe haven yen is pushing higher as the market seeks protection following Trump’s trade tariff announcements.
Trump escalated the global trade war with sweeping new tariffs of 34% on goods imported from China and 20% on goods imported from the EU. Japan will see a 24% tariff.
The US will also impose a universal 10% tariff on all countries, including the UK. Trump’s trade tariffs sent U.S. stock markets tumbling, with the S&P 500 down 1.5% and the NASDAQ 100 dropping 2.6% as investors sold out of riskier assets.
The US Dollar is falling against the yen but rising versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is -0.54% lower at 103.81 at the time of writing, after rising 0.05% yesterday.
The dollar is falling sharply on fears over what the trade tariffs will mean for the US economy. Fears of an economic slowdown and rising inflation are growing.
Hopes that Trump might adopt a lighter touch have been wiped away and the markets now brace for grueling trade negotiations against a backdrop of slowing consumer and business confidence.
The market is likely to remain on edge for the foreseeable as tit for tat talks take place.
Treasury Secretary urged trading partners not to take retaliatory measures. Any retaliation could lead to further escalation in the trade war.
Earlier in the session, US ADP payrolls rose by 155k up from 84k in February. There was minimal reaction to the report. Factory orders also rose 0.6% after an upwardly revised 1.8% in January.