International News 04 March 2025
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Japanese Yen Strengthens to Start the Week After Two Days of Correction
The Japanese yen strengthened against the US dollar as the dollar weakened against other major currencies. The euro's strength was influenced by optimism over a possible resolution to the war in Ukraine. The dollar's weakness was also driven by comments from US Commerce Secretary Howard Lutnick, who suggested that tariffs on Mexico and Canada could still change and be lower than the proposed 25%. However, he did confirm that a 10% tariff on China would definitely go ahead. On the domestic front, Japan's manufacturing PMI for February remained in contraction territory for the sixth consecutive month, although it was revised slightly higher. The Bank of Japan is expected to raise interest rates further this year as economic, price and wage developments support its policy normalisation efforts.
Ukrainian President Zelenskiy Optimistic He Can Save Ties with US
Ukrainian President Volodymyr Zelenskiy is confident of maintaining his relationship with US President Donald Trump, despite a tense meeting in the Oval Office. Zelenskiy stressed the need for further closed-door talks and said Ukraine would not cede territory to Russia in a peace deal. He also expressed a willingness to sign a mineral agreement with the US and said it was important to discuss a peace plan with European leaders. During the meeting, Trump accused Zelenskiy of being ungrateful and risking World War III, raising doubts about Washington's support for Ukraine. Zelenskiy, speaking after a European summit, stressed the importance of relations with the US and acknowledged that an open format of discussion had not been beneficial. He believed that the US and other leaders would not stop their military support for Russian President Vladimir Putin, but would remain prepared for any eventuality. European leaders also agreed to develop a plan to save Ukraine.
Asia-Pacific Markets Gain Monday Morning, Investors Await Clarity on US Tariffs
Asia-Pacific equity markets rallied as investors awaited details of the US President's tariff plans. US Commerce Secretary Howard Lutnick said that the specific tariffs to be imposed on Mexico and Canada were still uncertain. This suggests that the tariffs could be lower than the 25% originally proposed. Lutnick also confirmed a 10% tariff on imports from China. In Asian markets, Japan's Nikkei 225 and Topix indices opened higher, while Australia's S&P/ASX 200 index also rose. The S&P Global Manufacturing Purchasing Managers' Index for Australia was close to the previous month's level in February. Hong Kong's Hang Seng Index futures pointed to a potentially lower opening. Investors were also awaiting the release of China's manufacturing PMI index. In India, the focus was on stock movements following the country's 6.2% economic growth in February.