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U.S. President Trump to announce tariff details on

Wednesday

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Euro drops with markets betting on ECB rate cut in April

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Aussie flat after RBA decision

(Recasts)

By Stefano Rebaudo

April 1 (Reuters) - The yen jumped and the dollar index

edged higher on Tuesday as investors moved into safe-haven

currencies ahead of reciprocal tariffs that U.S. President

Donald Trump is due to announce on Wednesday.

Investors see the Japanese currency as a safer asset than

the dollar in the current environment, as U.S. tariffs would

likely hurt the U.S. economy as well.

Markets were quiet earlier in the session, with the dollar

and the euro close to Monday's levels.

The greenback dropped 0.52% to 149.15 versus the yen,

while the euro fell 0.8% to 160.85.

Markets will monitor the U.S. Job Openings and Labor

Turnover Survey (JOLTS) and the ISM manufacturing index later in

the session, both of which could provide further insights into

how uncertainty in U.S. trade policy is hurting its economy.

The dollar index, which measures the U.S. currency

against six rivals, was 0.1% higher at 104.30.

Trump announced late on Sunday that all countries would face

new tariffs this week, though he provided no specific details.

He had previously talked about 25% tariffs against European

goods.

White House aides have drafted a proposal to impose tariffs

of around 20% on most imports to the United States, the

Washington Post reported on Tuesday.

"We expect roughly a one-month delay in (tariff)

implementation, leaving space for negotiation," said Claudio

Irigoyen, head of global economics at Bank of America.

European Commission President Ursula von der Leyen said the

EU was open to negotiations with the U.S. on trade, but would

retaliate strongly if necessary.

The euro dropped 0.3% to $1.0788 after gaining

4.5% in the first quarter of the year, its strongest quarterly

performance since October-December 2022, thanks mainly to

Germany's commitment to sharply increase fiscal spending.

"The risk of high tariffs disrupting trade and economic

activity would potentially offset any U.S. federal revenue gains

that the Trump administration seeks to use to further domestic

policies," said Mark Haefele, global wealth management chief

investment officer at UBS.

Geopolitical tensions remain in focus as the Chinese

military said it had conducted drills in waters to the north,

south and east of Taiwan on Tuesday.

Investors recently boosted their bets on future European

Central Bank rate cuts due to tariff fears and weak economic

data, driving bond yields and the single currency lower.

Money markets priced in approximately an 80% chance of an

ECB easing move this month, amid mixed

remarks from central bank officials.

The ECB's Fabio Panetta, who markets regard as a dovish

policymaker, said the ECB needs to be cautious in reducing

rates. Finnish Central Bank chief Olli Rehn said it should cut

in April if inflation keeps moving in line with its projection.

"We remain generally cautious about following any

euro/dollar rally into the tariff event and instead see mostly

downside risks, barring any meaningful U.S. data surprise," said

Francesco Pesole, forex strategist at ING.

The Australian dollar was flat at 0.6244 after the

central bank left rates unchanged as expected. It hit 0.6217 on

Monday, its lowest since March 4.