The Japanese yen rose in the Asian market on Monday at the start of the week’s trading against a basket of global currencies, approaching again its highest levels in two weeks against the US dollar, as markets await the release of more economic data and comments that could provide strong evidence on the path of Japanese interest rates this year.

The US currency fell toward its lowest level in two weeks, pressured by strong expectations that the Federal Reserve will cut interest rates at least twice before the end of this year.

Price Overview

• USD/JPY today: The dollar fell against the yen by 0.2% to (147.43¥) from the opening price of (147.701¥), recording a high of (147.79¥).

• The yen lost 0.4% against the dollar at Friday’s close, its first loss in three days, as part of a correction and profit-taking from the two-week high at 146.62 yen, in addition to the release of grim economic data in Japan.

• The Japanese yen fell by 0.25% against the US dollar last week, marking its first weekly loss in three weeks, due to a recovery in US yields.

Japanese Interest Rates

• Minutes of the June monetary policy meeting showed that some members of the Bank of Japan’s board said the central bank would consider resuming interest rate hikes if trade tensions eased.

• Market pricing for the Bank of Japan raising interest rates by a quarter point at the September meeting is stable around 45%.

• To reprice these expectations, investors are awaiting more data on inflation, unemployment, and wages in Japan.

US Dollar

The US Dollar Index fell by more than 0.2% on Monday, nearing a two-week low at 97.95 points, reflecting the decline of the US currency against a basket of major and minor currencies.

Focus remained on trade talks as the August 12 deadline set by Trump for reaching an agreement between the US and China approached.

According to CME’s FedWatch Tool: market pricing for a 25 basis point rate cut at the September meeting is currently stable at 88%, while pricing for keeping rates unchanged stands at 12%.

To reprice these expectations, investors this week are awaiting the release of the main US inflation data for July, which will clarify the extent to which higher tariffs have affected prices and the degree of inflationary pressure faced by Federal Reserve policymakers.

On Wednesday, US President Donald Trump announced that the United States would impose a 100% tariff on imported semiconductor chips unless companies make a formal commitment to build or expand production facilities within the US.

The move aims to restructure the global semiconductor supply chain by encouraging domestic manufacturing. Major companies like Apple — which recently pledged over $100 billion in new US investments, raising its total commitment to $500 billion — stand to benefit from tariff exemptions. Leading chipmakers such as TSMC, Samsung, and SK Hynix are also expected to qualify due to ongoing or planned production projects in the US.

Markets reacted in mixed fashion: SK Hynix shares initially fell 3.1%, but quickly recovered after a South Korean trade envoy confirmed that both SK Hynix and Samsung would be exempt from the tariffs because of their US manufacturing commitments. Meanwhile, US stock futures rose as investor confidence grew that companies like Apple and Nvidia would be granted exemptions amid a broader push for local production.

The announcement fits within Trump’s broader protectionist approach, following a recent executive order that raised tariffs on India to 50% — a move tied to oil trade between New Delhi and Moscow. The chip tariff announcement came after a US Commerce Department investigation into semiconductor imports, citing national security concerns. The administration’s message is clear: foreign firms must invest in the US or face punitive tariffs.

However, experts warn that this action could disrupt global supply chains, drive up consumer prices, and create logistical challenges. Semiconductors are vital to industries ranging from automotive to renewable energy, and any disruption could have widespread repercussions.

Industrial leaders are already adjusting their investment and production strategies. Still, analysts remain cautious, noting that many of the announced commitments may be rebranded old plans rather than immediate factory expansions.

The situation is further complicated by how exemptions will be allocated — particularly for chip-producing nations such as the European Union, South Korea, and Japan. These countries are closely watching US policy, especially in light of recent trade deals that capped some tariffs at around 15%.

How Will Trump’s Chip Tariffs Work?

Trump announced the new chip tariffs at a White House event on August 6, stating that exemptions would be granted to companies committed to building chip manufacturing facilities in the US.

Details remain scarce — it’s still unclear when the tariffs will take effect or how they’ll impact chip-containing products like laptops.

“There are a lot of exceptions,” said Jason Miller, a supply chain professor at Michigan State University. “Until we see the specific harmonized tariff codes that the duties will apply to, it’s impossible to fully understand the consequences.”

The US already produces a significant number of semiconductors, exporting about $58 billion annually, according to US Census Bureau data. However, Miller noted that the US specializes in high-end chips, while less sophisticated, widely used chips are mostly imported from countries like Malaysia. The most advanced chips still come from Taiwan.

Data shows the US imports nearly $60 billion in chips each year. “The US is not cost-competitive in producing low-end, generic chips like those found in household appliances,” Miller said. “It makes more sense to focus on high-end products where we have a competitive advantage.”

Rogers agreed that expanding US chip manufacturing makes sense, pointing to progress made under the 2022 CHIPS and Science Act signed by former President Joe Biden. Still, he warned that chip industry expansion takes time — building new fabs and training skilled workers doesn’t happen overnight. “We’re on the right path,” he said, “but the road is long. We can’t ramp up fast enough to meet total domestic demand.” He also warned that the additional burden on companies could actually slow this progress.

What Does This Mean for Prices?

Experts told USA Today that these tariffs won’t impact manufacturers as dramatically as other duties — like the 50% tariff on steel and aluminum or the 25% on cars. However, they could still pressure companies already grappling with rising import costs.

“This action is not deflationary in any way,” said Miller. “But frankly, we can’t assess the inflationary impact until we know more.”

John Mitchell, president and CEO of the global electronics trade association IPC, said the tariffs could raise the prices of laptops, home appliances, cars, and medical devices.

“More than 60% of our member companies have reported that previous tariffs increased costs and delayed production,” he wrote in a statement.

For products like cars, chips may represent a small portion of total production costs. Still, Ivan Drury, Director of Insights at car research firm Edmunds, called the tariffs “another wound” for the auto industry — which already faces a 25% tariff on vehicle imports.

Automakers say they’re already incurring losses. General Motors said in July that tariffs cost it over $1 billion in Q2 alone. Stellantis estimated tariffs would cost it $1.7 billion this year.

“It’s death by a thousand cuts,” said Drury. Automakers are currently absorbing the costs, but he questioned how long that can continue: “We haven’t seen it show up in consumer prices yet, but shareholders won’t tolerate that forever.”

He also warned that used car owners could be hit hard by rising repair costs, as repair shops may pass higher chip prices directly to customers. More expensive repairs could also drive up insurance premiums.

“It’s a snowball effect,” he said. “It hasn’t hit yet — but we know disruption is coming.”

Could There Be a Shortage?

Another concern for consumers is whether the tariffs might make some products harder to find.

The US already experienced such a scenario during the COVID-19 chip shortage, which restricted access to new cars, laptops, and gaming consoles.

While the new chip tariffs aren’t expected to cause such a widespread shortage, Rogers warned that some companies may reduce output if import costs rise too high. Stellantis, for example, halted production at certain factories to avoid paying duties — a move that contributed to a 6% year-over-year drop in vehicle shipments in Q2.

“I think we could see shortages in several areas,” Rogers said. “It won’t be like 2021 when chips were unavailable altogether. But in this case, we’ll just have to pay more — and when things cost more, we tend to buy less.”

US stock indices rose during Friday trading as markets closely tracked the latest developments in trade negotiations between the United States and its partners.

Late Wednesday, former President Donald Trump announced a 100% tariff on imported chips, with an exception for companies that "manufacture within the United States."

Trump explained on Wednesday: “We will impose very large tariffs on chips and semiconductors. But the good news for companies like Apple is: if you manufacture in the United States or have firmly committed to doing so, you won’t be subject to any tariffs.”

A report from Bloomberg, citing informed sources, stated that Federal Reserve Governor Christopher Waller has emerged as a leading candidate to succeed the current Fed Chair.

As for trading, by 17:30 GMT the Dow Jones Industrial Average was up 0.5% (215 points) to 44,183, while the broader S&P 500 index rose 0.7% (48 points) to 6,388. The tech-heavy Nasdaq Composite gained 0.9% (187 points) to reach 21,430.

Copper prices rose for the third consecutive session on Friday, supported by expectations of US interest rate cuts following a new appointment to the Federal Reserve, alongside positive economic data from China.

Benchmark three-month copper on the London Metal Exchange (LME) rose by 0.2% to $9,700 per metric ton in official trading, continuing its recovery after touching a three-week low on July 31.

US President Donald Trump announced his nominee for a vacant Federal Reserve seat on Thursday, boosting hopes of rate cuts and weakening the dollar. A weaker dollar makes dollar-denominated commodities cheaper for buyers using other currencies.

“Dollar weakness has been the main driver in August,” said Dan Smith of Commodity Market Analytics. “We’ve got a weaker dollar and China is looking relatively healthy, so fundamentally things are looking positive right now.”

Data released Thursday showed that Chinese exports exceeded expectations in July, as manufacturers took advantage of a fragile tariff truce between Beijing and Washington to boost shipments.

The most-traded copper contract on the Shanghai Futures Exchange rose 0.1% to 78,490 yuan ($10,929) per ton.

Smith noted that copper on the LME appears to have bullish potential according to algorithmic models simulating investment fund behavior, which place buy and sell orders based on momentum signals. “I think there’s a chance that we’ll see buy signals return next week for copper, with a shot at reaching $10,000,” he added.

US Comex copper futures rose 0.7% to $4.43 per pound by 12:15 GMT, widening the price spread between Comex and LME copper to $62 per ton.

On the supply front, investors are monitoring developments in Chile — the world’s largest copper producer — where Codelco is seeking approval to reopen part of a major mine after a fatal accident last week.

As for other metals, performance was mixed: aluminum on the LME held steady at $2,610 per ton, zinc was little changed at $2,812.50, tin rose 0.2% to $33,800, nickel dropped 0.3% to $15,075, and lead fell 0.6% to $1,998.

Meanwhile, the US dollar index declined by 0.2% to 98.2 points by 17:13 GMT, after reaching a high of 98.3 and a low of 97.9.

In US trading, copper futures for September delivery rose by 1.6% to $4.47 per pound as of 17:07 GMT.