Initially announced “reciprocal tariffs” of 24% worldwide, but changed policy to a 90-day suspension of tariffs on non-China. Tariffs on China are now more than 145%. The market reaction to this was a sharp drop in U.S. stocks, especially technology stocks, and a rapid appreciation of the yen against the dollar. Concerns about the impact on corporate earnings are spreading.
The trade war has escalated and the game of chicken is still on, with the Trump administration likely to raise tariffs against China even higher, and China is likely to raise tariffs in response. However, the Trump administration has indicated that it will continue to negotiate with China, and this could fluctuate in the future.

In Japan, reports of a 90-day moratorium on tariffs sent the dollar and stocks sharply higher from the 144-yen level to over 148-yen, and both the dollar and stocks seemed to be in a “bottoming out? However, 24 hours have passed, and the dollar and the yen have easily fallen back. The 10% flat tariff remains in place, and the 145% tariff on China will set the global economy back.
Treasury Secretary Bessent is now the negotiator, but he will not allow the yen to weaken. In fact, he is likely to demand a very high level of yen appreciation. Is he wary of the risk of a strong yen?

Prices in the U.S. will rise, consumption will slow, and the economy will go into recession, but China and other countries will also go into recession at the same time. A global recession is just around the corner. When that happens, it will be tough for stock prices to keep rising even though they have rebounded.
The focus will be on the U.S. stock and bond markets. In particular, if the bond market becomes unsettled, dollar selling may accelerate. In the end, there will be no major changes. We want to heed the warnings issued by the U.S. financial markets.