Yen loses ground amid new US tariff plans

The yen showed a significant drop on Tuesday after US President Donald Trump announced plans to impose 25% tariffs on goods from Japan and South Korea.

According to the US leader, the increased US tariffs will start to take effect on August 1. Later, Trump indicated readiness for negotiations and postponement of the introduction of duties, if the mentioned countries make proposals.

The latest move in US trade policy has left investors distraught. On Tuesday, the sentiment in Asian markets remained poor.

At the start of the trading session, the yen fell to a two-week low of around 146.4 against the US dollar. The Japanese currency has since recovered some losses, but is still under pressure. The yen also fell to a one-year low against the euro and hit its lowest level in eight months against the British pound.

Japan's Prime Minister Shigeru Ishiba said Tuesday he will continue talks with the US to reach a mutually beneficial trade deal. Morgan Stanley economists also expect the discussions to continue. However, they noted that given the imminent Japanese parliamentary elections, the bar for reaching an agreement is high.