Dollar Slips as Asia Reopens Amid Renewed Turmoil Over Trump Tariffs

By Rocky Swift

Market Reaction to Renewed Tariff Turmoil

TOKYO, Feb 24 (Reuters) - The dollar languished on Tuesday as Asian markets weighed the fallout on global trade from renewed turbulence over U.S. President Donald Trump's tariff regime.

The greenback held losses as China and Japan reopened after holidays and Trump warned countries against retreating from recent trade deals after the Supreme Court struck down his emergency tariffs. 

The yen was a shade weaker after the Nikkei newspaper said U.S. authorities took the lead in conducting so-called rate checks last month to prop up Japan's currency.

Policy and Legal Backdrop

Washington's latest tariff threats are clouding the outlook for global trade, following the Supreme Court's ruling that Trump's use of a 1977 emergency law to impose tariffs exceeded his authority. 

Strategist View from NAB

"Now we're back in a very uncertain environment," Ray Attrill, head of currency strategy at National Australia Bank, said on a NAB podcast. "It's just the uncertainty about what the future trade landscape will look like, just at a point where most countries had signed or were on the cusp of signing trade deals."

FX Moves and Dollar Index

The dollar index, which measures the greenback against a basket of currencies, was flat at 97.69, after a swoon of as much as 0.45% in the prior session.

The euro rose 0.07% at $1.1793, while the yen weakened 0.03% against the greenback to 154.71 per dollar.

Trump said on Saturday he would raise a temporary tariff from 10% to 15% on U.S. imports from all countries, the maximum level allowed under the law. On Monday, he took to social media to say that countries that "play games" in the wake of the Supreme Court's ruling would be hit with even higher duties.

Tariff Sectors Under Review

The Trump administration is considering new national security tariffs on industries like large-scale batteries, cast iron and iron fittings, plastic piping, industrial chemicals and power grid and telecom equipment, the Wall Street Journal said.

EU Trade Deal Vote Delayed

The European Parliament decided on Monday to postpone a vote on the European Union's trade deal with the United States due to the new import tax.

Japan–U.S. Tariff Contacts

Japan's government said trade minister Ryosei Akazawa spoke with U.S. Secretary of Commerce Howard Lutnick on Monday and requested that Tokyo's treatment under new tariff measures not be less favourable than last year's agreement.

Reported U.S. Rate Checks

Japan and Yen Dynamics

With Japan reopening after a long weekend, the yen was slightly weaker after a Nikkei report that the U.S. conducted rate checks in the market in January without a request from Tokyo and was ready to conduct joint intervention to bolster the yen.

The renewed trade uncertainties come as doubts creep in about the sustainability of massive investments in artificial intelligence and as Federal Reserve policymakers express concerns about elevated inflation.

Central Bank Signals

The U.S. central bank is expected to keep rates on hold until at least June. Fed Governor Christopher Waller said on Monday he was open to leaving interest rates on hold at the Fed's March meeting if upcoming February jobs data indicates the U.S. labor market has "pivoted to a more solid footing" after a weak 2025.

Traders are also focused on rising geopolitical tensions.

Geopolitical Tensions and Risk Sentiment

The State Department is pulling out non-essential government personnel and their eligible family members from the U.S. embassy in Beirut, a senior State Department official said on Monday, amid growing concerns about the risk of a military conflict with Iran. 

Asia-Pacific Currencies

The Australian dollar strengthened 0.1% versus the greenback to $0.7061. New Zealand's kiwi rose 0.08% to $0.5961.

Crypto Market Snapshot

In cryptocurrencies, bitcoin gained 0.6% to $64,961.86, and ether rose 0.2% to $1,866.88.

(Reporting by Rocky Swift; Editing by Sonali Paul)