During Asian trading on 2 April 2025, new tariff updates emerged late in the US afternoon. Reports indicated that the US Treasury and Commerce departments are considering a general tariff increase on a select number of nations, which will not exceed 20%.
US Treasury Secretary Bessent stated that the tariffs announced today would act as a cap, allowing countries to potentially lower these tariffs later. Following this news, risk-sensitive currencies like the EUR, AUD, and NZD briefly strengthened before returning to previous levels, with the AUD and NZD showing notable performance.
Reserve bank of australia adjusts open market operations
Reserve Bank of Australia Assistant Governor Christopher Kent announced a slight increase in rates on new RBA OMO repos by 5 basis points. He clarified that this adjustment does not alter monetary policy, yet the AUD gained value during the session.
Bank of Japan Governor Ueda discussed potential impacts of US tariff policy on trade activity during a parliamentary address, though the yen showed minimal movement, with USD/JPY hovering just above 149.90. Gold prices surged to around US$3135.
The existing content outlines fresh tariff intentions from US officials, a subtle shift in Australian market operations, and reactions across currencies and commodities. It highlights three main things: the United States appears to be testing the waters with a trade barrier that could be reversed later; monetary authorities in Australia made a tweak to money market settings, although this isn’t technically a move in policy direction; and despite mentions of trade disruptions, Japan’s central bank observed only limited effects on its currency. Metals traders responded swiftly, sending gold higher—likely on renewed concerns about uncertainty and inflation.
Market sentiment reacts to policy ambiguity
For short-term volatility traders, this backdrop introduces both timing pressures and selective dislocations, particularly in currencies and commodities closely tied to the US dollar. The euro’s brief lift alongside the Australian and New Zealand dollars deserves attention, not because of the move itself—it was temporary—but because of what it revealed. Markets are starting to price geopolitical rhetoric with less patience, even when central banks attempt to clarify intentions.
Bessent’s comments suggest a tariff ceiling rather than a floor, which spells increased range-trading on tariff-sensitive assets. The market may read this as flexibly restrictive, not immovably harsh, which means we should expect reactions to be layered and not uniform. Kent’s slight adjustment to repo deals caused the Aussie dollar to catch a short gust upward. That shift was not mechanical—it fed into perceptions that Australia might be preparing to harden its tone or respond more directly if inflation continues to resist lower targets. Futures pricing for short-term rates showed limited follow-through, which hints that some hesitation remains.
Governor Ueda tried to address concerns constructively—his remarks were clearly aligned with a broader keeping-of-the-course—but yen traders seemed unimpressed, possibly already prepared for more pressing shifts in relative yield spreads. The 150.00 level remains psychologically sticky and could become a magnet point for options-related flows, which hedgers will not be ignoring. If tariffs accelerate into summer quarters, Japan will feel second-order effects rather than direct hits, which means general volatility could outpace directional trend moves on the yen itself.
The surge in gold looks less like a wholesale repositioning and more like a protective layer being added at speed. At these levels, we notice increased open interest in double-no-touch options near the 3100 and 3200 marks, a sign that some are positioning for reactive two-way risk. Opportunities may arise for those who can capitalise on such barriers being triggered on news days.
Going forward, we view recurring headline pressure as a real driver of very short-term range expansions, while intermediate-term positioning gets muddied by policy vagueness that’s deliberate. Reaction trades will need to be measured, especially with liquidity thinner in Asia overnight sessions, where these stories tend to break. For now, reactivity remains king—until clarity starts earning a premium again.
