Select Language

GBP/JPY rises to near 196.50 as BoJ remains uncertain about economic impact of US tariffs

Breaking news

GBP/JPY rises to near 196.50 as BoJ remains uncertain about economic impact of US tariffs

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
update 2025.08.04 18:10
GBP/JPY rises to near 196.50 as BoJ remains uncertain about economic impact of US tariffs

update 2025.08.04 18:10

  • GBP/JPY appreciates as the Japanese Yen struggles amid the BoJ's uncertainty over the US tariff impact.
  • Japan's political uncertainty further complicates the BoJ's policy normalization path.
  • The Bank of England is widely expected to implement a 25 basis point rate cut on Thursday.

GBP/JPY recovers its recent losses registered in the previous session, trading around 196.50 during the European hours on Monday. The currency cross gains ground as the Japanese Yen (JPY) depreciates, as the Bank of Japan (BoJ) remains uncertain over the economic impact of higher United States (US) tariffs.

Moreover, the Japanese Yen (JPY) remains under pressure due to domestic political uncertainty, which could further hinder the Bank of Japan's (BoJ) efforts to normalize monetary policy. The ruling Liberal Democratic Party's loss in July raises the likelihood of further delays to BoJ rate hikes.

Meanwhile, Japanese Economy Minister and chief trade negotiator Ryosei Akazawa said on Monday that the recently announced US-Japan trade agreement is not a legally binding commitment. Akazawa highlighted that $550 billion investment in the US could ultimately lead to benefit Japan. He hopes to implement the US cars deal as early as possible.

Japanese Prime Minister Shigeru Ishiba stated that the government is ready to compile an additional budget to cushion the economic impact of US tariffs, acknowledging growing political pressure following his coalition's recent loss in the upper house elections.

The Pound Sterling (GBP) may face challenges as the Bank of England (BoE) is widely anticipated to deliver a 25 basis point rate cut during its monetary policy decision on Thursday. Moreover, concerns rise over the United Kingdom's (UK) economic outlook and fiscal health. Investors remain increasingly pessimistic about Britain's growth prospects, fueling expectations of the BoE's interest rate cut in August.

Tariffs FAQs

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.


Date

Created

 : 2025.08.04

Update

Last updated

 : 2025.08.04

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

EUR/JPY maintains position near 172.50 following German IFO data

EUR/JPY extends its gains for the third successive session, trading around 172.40 during the European hours on Monday. The currency cross moves little after the release of German economic data.
New
update2025.08.25 17:24

Pound Sterling rises as Fed's Powell surprisingly turns dovish on interest rates

The Pound Sterling (GBP) clings to Friday's gains near 1.3530 against the US Dollar (USD) during the European trading session on Monday.
New
update2025.08.25 17:19

USD/CAD Price Forecast: Faces selling pressure above 200-day EMA

The USD/CAD pair trades cautiously near Friday's low around 1.3820 during the European trading session on Monday.
New
update2025.08.25 17:18

USD/CHF remains above 0.8000 following improved Swiss Employment Level

USD/CHF inches higher after registering nearly 1% losses in the previous session, trading around 0.8020 during the Asian hours on Monday. The pair remains stronger following the improved Switzerland's non-farm payrolls data.
New
update2025.08.25 16:46

USD/JPY recovery halts at 147.50 with monetary policy divergence weighing

The US Dollar's recovery attempts from Friday's lows at 146.60 against the Japanese Yen have been capped around the mid-range of the 147.00s on Monday as the pair remains on the defensive amid an unfavourable monetary policy divergence following Fed Powell's dovish comments.Jerome Powell shocked mar
New
update2025.08.25 16:37

Forex Today: US Dollar stabilizes after Powell-inspired selloff

Here is what you need to know on Monday, August 25:
New
update2025.08.25 16:31

EUR/GBP softens to near 0.8650 amid no progress on Russia-Ukraine peace deal

The EUR/GBP cross loses ground to around 0.8660 during the early European session on Monday. A slew of better-than-expected UK economic data provides some support to the Pound Sterling (GBP) against the Euro (EUR).
New
update2025.08.25 15:52

Crude Oil price today: WTI price bullish at European opening

West Texas Intermediate (WTI) Oil price advances on Monday, early in the European session. WTI trades at $63.71 per barrel, up from Friday's close at $63.68.Brent Oil Exchange Rate (Brent crude) is stable, hovering around its previous daily close at $67.32.
New
update2025.08.25 15:06

EUR/USD Price Forecast: On the verge of trendline breakout above 1.1700

EUR/USD clings to gains above 1.1700 at the start of the week.
New
update2025.08.25 14:48

When is the German IFO Survey and how it could affect EUR/USD?

Germany's IFO institute will publish its business survey for August on Monday at 0800 GMT. The headline IFO Business Climate Index is expected to stay unchanged at 88.6 this month.
New
update2025.08.25 14:38

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel