
Yen firms as investors gird for political uncertainty
The Japanese markets are closed for the day leaving the yen as an indicator of investor angst. Prime Minister Shigeru Ishiba's Liberal Democratic Party returned 47 seats, short of the 50 seats it needed to ensure a majority in the 248-seat upper chamber in an election where half the seats were up for grabs.
The yen firmed to 148.32 per dollar in early trading, staying close to the 3-1/2-month low it hit last week as the election result was mostly priced in by investors. It firmed a bit against the euro to 172.64.
While the ballot does not directly determine whether Ishiba's administration will fall, it heaps political pressure on the embattled leader who also lost control of the more powerful lower house in October.
Chris Weston, head of research at Pepperstone, said the LDP coalition could still partner with the Democratic Party for the People (DPP) to get the 50 seats required, and "that is helpful for the yen."
"However, most importantly, PM Ishiba has been defiant in his stance to stay the course as PM, but his hand has been sufficiently weakened."
The election result, while not entirely a shock to markets, also comes at a tricky time for a country trying to get a tariff deal with U.S. President Donald Trump before an Aug. 1 deadline.
Japanese government bonds (JGBs) plunged last week, sending yields on 30-year debt to an all-time high, while the yen slid to multi-month lows against the U.S. dollar and the euro.
If Ishiba resigns, the political maelstrom could be a trigger for foreign investors to sell Japanese shares and the yen, analysts said.
Elsewhere, investor focus has been firmly on Trump's global tariff salvos, with a Financial Times report last week indicating the U.S. president was pushing for steep new tariffs on European Union products.
The euro was steady at $1.163225 in early trading, while sterling last fetched $1.13417. The dollar index , which measures the U.S. currency against six others, was at 98.352.
The New Zealand dollar eased 0.18% to $0.5951 after annual consumer inflation accelerated in the second quarter but stayed below economists' forecasts, leading markets to raise the chance of a rate cut next month given the broader economic weakness.
In cryptocurrencies, bitcoin fell 1% to $116,939, holding below a record $123,153 reached last week.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Reuters
8 hours ago
- Reuters
Dollar heads for biggest weekly drop in a month as focus shifts to Fed, BOJ meets
SINGAPORE, July 25 (Reuters) - The dollar steadied near two-week lows on Friday, on track for its biggest weekly drop in a month, as investors contended with U.S. tariff negotiations ahead of a deadline while looking ahead to central bank meetings next week for clues on policy. Both the U.S. Federal Reserve and the Bank of Japan are expected to hold rates at next week's policy meetings, but traders are focusing on the subsequent comments to gauge the timing of the next move. "Next week's BOJ policy meeting will be closely watched for hints on the timing of the next rate hike," said Carol Kong, currency strategist at Commonwealth Bank of Australia. The prospect of rate hikes by the BOJ had improved, she added, after a trade deal struck with the United States this week lowered tariffs to 15% on auto imports from Japan. The yen stood at 147.10 to the dollar, on course for a weekly gain of 1%, its strongest such performance since mid-May. A majority of economists in a Reuters poll this week expect Japan's central bank to raise interest rates by 25 basis points this year. The dollar index , which measures the U.S. currency against six other units, was at 97.448, set for a drop of 1% this week, its weakest performance in a month. On Thursday, the European Central Bank left its policy rate at 2%, as expected, in a break from a year of policy easing, to await clarity over future U.S. trade ties after the European Commission said a negotiated solution was in reach ahead of the August 1 deadline. The euro was little changed at $1.1754 in early trade, but not far from $1.183, the near four-year high it touched at the start of the month. The euro is up 13.5% this year as tariff policies take the shine off the dollar. Progress on trade deals has also raised market hopes for talks with China, after U.S. Treasury Secretary Scott Bessent said officials of both countries would meet in Stockholm next week to discuss an extension of the deal negotiation deadline. The Australian dollar has been boosted by the rise in risk appetite after the trade deals and was last at $0.6593, hovering near an eight-month high touched on Thursday. Donald Trump locked horns on Thursday with Fed Chair Jerome Powell during a rare presidential visit to the central bank, criticising the cost of renovating two historical buildings at its headquarters and pressing the case for lower interest rates. Markets mostly shrugged off the visit, however, having become accustomed to Trump's repeated tirades against Powell and the Fed. "Trump's Fed visit was spectacle over substance," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. "The market's focus is firmly on next week's Fed meeting. We expect Powell to repeat a patient, data-dependent policy outlook with flexibility but (he) is unlikely to commit to cuts." At their two-day rate-setting meet, the central bank's 19 policymakers are widely expected to leave their benchmark interest rate in the range of 4.25% to 4.50%. Traders are pricing in 43 basis points of rate cuts by the end of 2025. ANZ strategists expect the Fed to cut rates by 25 basis points in September and again in December. "Were it not for tariff uncertainty, we judge that rate cuts would already have resumed," they said in a note. "The labour market is weakening, service price disinflation is well established, demand growth has slowed and there is no discernible evidence that higher tariffs are spilling into a broader inflation problem." In cryptocurrencies, bitcoin eased 0.79% to $117,840, while Ethereum was 2% lower at $3,655.


Auto Blog
9 hours ago
- Auto Blog
GM Beats Earnings Expectations But Still Down Year Over Year Thanks To Tariff Scare
By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Tariffs spoil GM's good news General Motors (GM) reported a strong second quarter for 2025, surpassing earnings expectations and increasing earnings per share to $2.53 (compared to expected earnings of $2.44 per share). The automaker reports more than $47 billion in revenue for Q2 2025, which is over $750 million better than expected, and states that its guidance for the year remains on track. In a statement, GM CEO Mary Barra says the company is invigorated by its growth in China and its electrified vehicle portfolio. Despite the positive news, GM stock is down approximately six percent in after-hours trading, and its year-over-year revenue is down, marking the largest year-over-year decline for GM since 2021, a period marred by the COVID-19 pandemic and widespread supply chain issues. The per-share earnings are also lower than this time last year. What has put GM in its worst position since the global shutdown? Tariffs. Door installation on a 2021 Chevrolet Tahoe at GM's Arlington Assembly plant. — Source: General Motors How tariffs are wreaking havoc for GM General Motors' full-year guidance, though still sound, is a result of a first-quarter pivot. Earlier this year, GM announced that it would revise its 2025 prospectus to reflect the potential for up to $5 billion in lost revenue due to tariffs. In May, Barra wrote, 'We are updating our full-year EBIT-adjusted guidance to a range of $10 billion – $12.5 billion, including a current tariff exposure of $4 billion – $5 billion.' Barra also noted, 'There are ongoing discussions with key trade partners that may also have an impact.' This suggests that tariffs would not only affect fully built GM vehicles imported to the United States, but also that supply chain partners may raise pricing should tariffs be imposed. In total, tariffs have cost GM $1.1 billion in 2025. Net income decreased 35 percent to $1.9 billion in Q2 2025, and total EBIT (earnings before interest and taxes) declined 32 percent to $3 billion globally, with a sharper decrease in North America, where EBIT fell 46 percent to $2.4 billion. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Where GM is investing and making money Though General Motors boldly predicted it would be all-electric by 2035, consumer demand isn't there. The company has since discarded its all-in-one plan for electrification, saying buyers will dictate the direction the company takes with the production of new vehicles. GM reports sales of 974,000 vehicles in Q2 2025, with a mere 46,300 being EVs. Barra told investors GM is focusing on improving per-vehicle profitability for EVs rather than scalability of the product line. So far, GM is re-investing in ICE vehicles. In June, the automaker announced plans to invest $4 billion in three North American plants: two in Mexico, one in the United States. The investment was focused on two plants in Mexico that produce gas-powered Chevrolet Blazer and Chevrolet Equinox SUVs, and to convert an idled Michigan plant to make ICE SUVs and trucks starting in 2027. 2025 GMC Sierra EV Denali — Source: Adobe Stock Photo Final thoughts Waning interest in EVs has been a developing storyline for North America in 2025, and GM is feeling it. Whether you like its vehicles, GM is a massive automaker, and its moves have a ripple effect throughout the industry. Even when it's reactive, GM is influential. Tariffs are a bargaining chip for the current administration, and GM is paying the price. Investments in North American facilities are sound for several reasons. Still, the auto industry operates on a global supply chain, which tariffs can cripple, regardless of the vehicle's powertrain. Moreover, the government is allowing the federal EV tax credit of $7,500 to expire in September, which is believed to be a major draw for buyers considering an EV. GM may have beaten expectations for Q2 2025, but it's clearly in preservation mode. Pivoting to increasing ICE production, absorbing the exposure from tariffs, and maintaining pricing is a disciplined approach – we will just have to see how long GM is prepared to toe the line before its bottom line suffers. About the Author Nate Swanner View Profile


BBC News
11 hours ago
- BBC News
Great Recall Taiwan: The vote targeting 'pro-China' lawmakers
For most of his life, Deng Pu didn't see himself as an activist – but that changed last at what he felt was undemocratic behaviour by Taiwan's lawmakers and overt Chinese influence in parliament, he joined thousands of others in a massive street protest. Two months ago, he signed up with a campaign has never done these things before. "Previous social movements were important, but to be honest they didn't make me this angry," the 39-year-old photographer told the BBC. "We are citizens... and we need to make sure our society sticks to its democratic systems and spirit." Now, that anger is reaching a turning point. On Saturday Taiwan will hold a vote to decide whether to kick out more than two dozen lawmakers accused of being too close to China, in what has been called "dabamian", or the Great unprecedented vote may alter the balance of political power in Taiwan. But already it has deepened political divisions, with both sides of the debate claiming to be the saviour of Taiwan's sacred began with last January's elections, when voters chose the Democratic Progressive Party's (DPP) William Lai as their president, but gave the opposition the dominant presence in the parliamentary Legislative the following months, the main opposition party Kuomintang worked together with the smaller Taiwan People's Party and independents to block DPP bills and pass controversial pieces of legislation. This included limiting the constitutional court's powers, cutting the government's budget, and raising the threshold for holding recall moves provoked significant outrage among some Taiwanese, who saw them as stymying the DPP government while strengthening the opposition's parliamentary power. In May 2024, thousands began holding protests in what became known as the Bluebird movement, named partially after the Taipei street where many had gathered. Many in the movement believe the opposition, led by the Kuomintang which is known for its relatively friendlier position on China, is being influenced by Beijing and secretly pushing China's agenda in Taiwan's party has denied this, but suspicion grew when a group of Kuomintang lawmakers visited China last year and were welcomed by top-ranking Chinese Communist Party official Wang groups in the Bluebird movement launched petitions to oust various Kuomintang lawmakers, while Kuomintang supporters retaliated by doing the same to some DPP far, petitions for 31 lawmakers' seats have received enough preliminary support to proceed with a final recall vote. All these seats are held by the Kuomintang - and if enough are successfully recalled, it could mean the DPP eventually gains the majority in the Taiwan has held recall votes before, it has never seen so many within such a short space of Saturday, citizens in 24 districts will vote on a simple yes or no question: whether they agree to boot out their legislator. Another round of voting will be held in August for the remaining recall each district, if the number of votes exceeds 25% of registered voters and more than half approve the recall, the seat will be vacated and a by-election must be held within three means that voter turnout is crucial for the Great Recall's success - and it is the reason why civic groups have been relentlessly flooding social media and pounding the streets canvassing for a recent weekday night, Deng Pu and several members of his civic group stood outside a Taipei subway station. Some held up banners and chanted slogans, while others distributed paper fans and tissue packets emblazoned with the words "Let's go out together to vote" and "Say yes to the recall".Mr Deng acknowledged that with several of the recall votes taking place in Kuomintang strongholds, even if they did succeed, the party could be re-elected in so, the Great Recall would still be worth it, he insisted. "The recall vote is a way to correct our democracy… it shows to all the parties that the power and the strength lies with the citizens."Mr Deng acknowledged that many in the Bluebird movement were DPP supporters, but denied that the civic groups were funded by the party – a theory heavily pushed by the opposition."We don't care whether DPP wins the by-elections. What's more urgent to us is that we hope to have a normal parliament, one that is not close to China and the Chinese Communist Party."He also took issue with what he saw as a weak response from the DPP, saying: "From the first recall petition till now, the civic groups have been telling the DPP that the citizens are here and there are many of us... We are strongly calling on the DPP to join us." The DPP had initially sought to distance itself from the Great Recall. But eventually it showed its support, with Lai stressing that the DPP "must align with the power of the people" and ordering party officials to assist pro-recall groups to "protect the nation".This has inevitably fueled the opposition's accusation that the DPP has secretly engineered the Great Recall and Bluebird movement, pointing to the fact that the DPP could reap the most political gain. It not only stands a chance of winning a permanent majority in the legislature. Even if the Kuomintang eventually wins in the by-elections, the DPP would have held the majority for a few weeks, giving it enough time to push through crucial protests organised by the Kuomintang and other opposition parties have drawn thousands. At one such rally in the New Taipei district of Banqiao last weekend, supporters showed up waving banners and chanting "No to the vote" while crossing their they took to the stage, speaker after speaker condemned the Great Recall while characterising William Lai as a fascist and authoritarian traitor of Taiwan's screens played videos of Lai doctored to make him look like Adolf Hitler with the words "Fuhrer Lai", as well as the slogan "Green Terror" – a reference to the DPP's party colour and the White Terror, a period of authoritarian rule and political repression under the rhetoric echoed that of Beijing, which has waded into the debate while watching from afar. Its Taiwan Affairs Office has accused Lai of "engaging in dictatorship under the guise of democracy" and "using every means possible to suppress the opposition"."The recall lawmakers were chosen by the majority of voters in their districts. If they are not good enough, they can be voted out in the next election," said rally attendee Mu Zili. "Why should we be using this evil way of getting rid of them?"The 68-year-old night shift worker insisted that the lawmakers were being targeted simply because they belonged to the Kuomintang, and that the Bluebird activists were working for the DPP."You can't have one party take down the other one in one big recall, this is not democratic," Ms Mu said."I side with blue," she added, referring to the Kuomintang's party colour. "But I don't oppose green. I'm here not because I support the Kuomintang, but to protect democracy."But there are also many Taiwanese who are on the the anti-recall rally from the sidelines was Banqiao resident Peggy Lin. Like several other bystanders the BBC spoke to, she was bewildered by the fuss over the Great Recall. "I don't know what it's about really, I haven't followed the debate at all… so I don't have an opinion," said the 43-year-old childcare worker."I will vote after I read more into it and decide based on how I feel on that day about it." Analysts say that regardless of the outcome, the Great Recall will leave a lasting impact on Taiwan's polarised political fighting has gotten nasty at times. Legislators have brawled in parliament over the political deadlock, while activists have faced doxxing and abuse. Mr Deng told the BBC that while out canvassing, he and his team mates had been assaulted or pushed around by residents opposing the vote has also not gone without scandal: officials have discovered numerous forged signatures, many of deceased voters, in recall petitions against both DPP and Kuomintang vote "will cement the notion of four year terms as not a given but as conditional on performance and subject to periodic reviews. Political polarisation will likely get worse before it gets better," said Wen-ti Sung, a political scientist with the Australian National University's Taiwan Studies the Great Recall is also "creating space for renewed political activism", especially for DPP supporters, added Dr Sung, which he characterised as an overall boon to the resiliency of Taiwan's civil Chong, a non-resident scholar with Carnegie China, said if many of the recall votes succeed, "one signal it would send to politicians in Taiwan is that they should be careful with how far they push the line in public sentiment… they can't stray too far as there would be consequences"."But if it fizzles out, then it emboldens politicians to do what they want," he noted. "It will intensify the polarisation… and it would be easy for politicians to write off the Great Recall as yet another civil society movement that doesn't get enough momentum beyond a certain part of the population."If there was a close but not conclusive result overall, however, it may mean "the Kuomintang and DPP will have to ultimately seek compromise and work together".This, added Dr Chong, "may not be a bad thing for Taiwan".