Tariff Tensions: Global Currencies React Amid U.S.-Asia Trade Standoff

The yen faced a significant drop on Tuesday as U.S. President Donald Trump reiterated his plan to impose a 25% tariff on goods from Japan and South Korea, marking a new chapter in his tumultuous trade war. The Australian dollar, on the other hand, surged when the country's central bank maintained its cash rate at 3.85%.

Prime Minister Shigeru Ishiba expressed Japan's commitment to continue trade negotiations with the U.S. despite the looming Upper House election, complicating the likelihood of a swift agreement. South Korea, meanwhile, saw its currency recover partially and is poised to intensify its own trade discussions with the U.S.

As uncertainty looms regarding tariff settlements, the global market remains jittery. Other major currencies, including the euro and the pound, saw modest gains, while the Australian market remains cautious following unexpected policy decisions from its central bank.

(With inputs from agencies.)