Yen Falls Amid Worries About Trump's Trade Tariffs

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Wednesday, as traders remain cautious amid raising fears of a brewing global trade war and its impact on inflation. They also reacted to U.S. Fed Chair Jerome Powell's cautious remarks on interest-rate cuts and awaited the release of U.S. CPI data for additional clues on future monetary policy.

Also, U.S. President Donald Trump could sign an order today to require that U.S. tariffs on imports match the tax rates charged by other countries.

On the geopolitical front, Israel sent more soldiers to the Gaza area and cancelled leave for troops already there after Hamas delayed the planned hostage release, saying that the language of threats has no value and further complicates matters.

"Trump must remember that there is an agreement that must be respected by both parties, and this is the only way to return the prisoners," Hamas official Sami Abu Zuhri told AFP.

Concerns over the economic effects of U.S. President Donald Trump's tariffs on commodities imports and reciprocal duties have kept the Japanese yen (JPY) weak for the third day in a row on Wednesday.

Powell told the Senate Banking Committee the central bank does "not need to be in a hurry" to adjust its policy stance. Powell added that interest rates have been lowered by a full percentage point since last September, describing the Fed's current policy stance as "significantly less restrictive than it had been."

Powell said, if the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly."

The Fed's next monetary policy meeting is scheduled for March 18-19, with CME Group's FedWatch Tool currently indicating a 95.5 percent chance the central bank will once again maintain the target range for the federal funds rate at 4.25 to 4.50 percent.

In the Asian trading now, the yen fell to 1-week lows of 159.32 against the euro and 191.39 against the pound, from yesterday's closing quotes of 158.32 and 190.22, respectively. If the yen extends its downtrend, it is likely to find support around 164.00 against the euro and 196.00 against the pound.

Against the Australian dollar and the Swiss franc, the yen slipped to nearly a 2-week low of 96.87 and a 6-day low of 168.36 from Tuesday's closing quotes of 96.20 and 167.31, respectively. The yen is likely to find support around the 99.00 region.

Against the U.S., the New Zealand and the Canadian dollars, the yen slid to 1-week lows of 153.73, 87.10 and 107.59 from yesterday's closing quotes of 152.77, 86.44 and 106.93, respectively. The next possible downside target for the yen are seen around 157.00 against the greenback, 89.00 against the kiwi and 111.00 against the loonie.

Looking ahead, U.S. MBA mortgage approvals data, U.S. CPI data for January, U.S. EIA crude oil data and U.S. monthly budget statement for January are slated for release.

At 10:00 AM ET, the Fed Chair Jerome Powell's testimony before the House Financial Services Committee is largely waited by the traders for more insight on interest rates, trade tariffs and economic outlook.