TOKYO (Web Desk) – The U.S. dollar languished on Tuesday as Asian markets reopened to renewed uncertainty over trade policy under U.S. President Donald Trump, following fresh tariff threats and a key Supreme Court ruling.
The greenback held on to recent losses as China and Japan resumed trading after holidays. Investors assessed the fallout after the Supreme Court of the United States struck down Trump’s emergency tariffs, ruling that his use of a 1977 emergency law to impose broad import duties exceeded presidential authority.
Despite the setback, Trump warned countries against stepping back from recently negotiated trade agreements and signaled tougher measures ahead.
Currency Market Snapshot
The U.S. dollar index, which measures the currency against a basket of peers, was flat at 97.69, after sliding as much as 0.45% in the previous session.
Euro: Up 0.07% at $1.1793
Japanese yen: Weakened 0.03% to 154.71 per dollar
The yen edged lower after Japanese daily Nikkei reported that U.S. authorities had conducted so-called “rate checks” earlier this year to help support Japan’s currency.
Trade Policy Uncertainty Deepens
Trump said he would raise a temporary tariff on U.S. imports from 10% to 15%, the maximum allowed under the law, and warned that countries that “play games” following the court’s ruling could face even higher duties.
The administration is also considering new national security tariffs on sectors such as large-scale batteries, cast iron and fittings, plastic piping, industrial chemicals, and power grid and telecom equipment, according to the The Wall Street Journal.
In Europe, the European Parliament postponed a vote on the European Union’s trade deal with Washington due to the new import tax developments.
Meanwhile, Japan’s trade minister Ryosei Akazawa spoke with U.S. Commerce Secretary Howard Lutnick, requesting that Tokyo not receive less favorable treatment under any new tariff regime.
Fed Outlook in Focus
Renewed trade tensions come as concerns grow over inflation and the sustainability of heavy investment in artificial intelligence.
The Federal Reserve is widely expected to keep interest rates on hold until at least June. Fed Governor Christopher Waller indicated he would support maintaining current rates at the March meeting if labor market data shows stability following earlier weakness.
Investors remain cautious as global markets navigate an increasingly uncertain trade landscape, with currency markets reflecting subdued confidence in the near-term outlook.
