*

Trump unveils 25% tariffs on Japan, South Korea

*

Japan's yen struggles to recover from losses

*

RBA leaves rates unchanged, Aussie jumps

(Updates with European price action, comments in paragraphs

8-12)

By Rae Wee and Amanda Cooper

SINGAPORE/LONDON, July 8 (Reuters) - The yen fell

broadly on Tuesday after U.S. President Donald Trump reiterated

that he plans to impose 25% tariffs on goods from Japan and

South Korea in the latest development of his chaotic trade war.

The Australian dollar charged higher after the

country's central bank defied market expectations and left its

cash rate steady at 3.85%.

Trump on Monday began telling trade partners - from

powerhouse suppliers like Japan and South Korea to minor players

- that sharply higher U.S. tariffs will start August 1, but he

later said that he was open to extensions if countries made

proposals.

The yen recovered overnight losses against the

dollar to trade steady on the day at 146.105, but fell against a

range of other currencies.

Prime Minister Shigeru Ishiba said on Tuesday he would

continue negotiations with the U.S. to seek a mutually

beneficial trade deal.

"There is still a lot of uncertainty as to where tariff

rates will eventually settle and which countries will get what

rates, so uncertainty about the global economy is still high and

that will keep investors on edge for the time being," said Carol

Kong, a currency strategist at Commonwealth Bank of Australia.

"This is just the start and we'll get more headlines out for

sure over the coming days."

The European Union will not receive a tariff letter and

could secure exemptions from the U.S. baseline rate of 10%, EU

sources familiar with the matter told Reuters on Monday.

Reflecting the contrasting fortunes of the two trading

partners, the euro hit a one-year high against the yen

and was last up 0.4% on the day at 171.745.

The euro rallied against the dollar as well,

rising 0.4% to $1.1735, partially recouping Monday's 0.67% loss.

"The view of the market is that it's an extension,

including in some cases more talks. So that's positive,"

Frederik Ducrozet, head of macroeconomic research at Pictet

Wealth Management, said.

"More of the same, less bad than feared with the door

still open to negotiation, I can understand why the market is

taking it in a relatively benign way," he said.

The South Korean won also fared better than its

Japanese counterpart, rising 0.66% to 1,366.12 per dollar,

recovering from Monday's 1% fall.

South Korea said it planned to intensify trade talks with

the United States.

RBA STUNS MARKETS

The standout performer among the major currencies on Tuesday

was the Aussie dollar, which rose more than 1% in

response to the RBA's surprise decision to leave rates

unchanged. It was last up 0.8% at $0.6545.

Markets had positioned for a cut, yet the central bank said

the board "judged that it could wait for a little more

information" to confirm that inflation was slowing.

Still, the board did note that the risks to inflation were

more balanced and appeared to be waiting for a reading on second

quarter prices due at the end of July before deciding.

"The uncertainty around Trump's tariffs means that it

doesn't embolden a decisive decision, whereas the need for more

assurance over inflation means they probably want to wait out

this meeting and get into August," said Vishnu Varathan, head of

macro research for Asia ex-Japan at Mizuho.

Markets shifted to imply around an 85% chance the RBA would

indeed cut to 3.60% at its August 12 meeting, and now favours

rates bottoming at 3.10% rather than 2.85%.

The New Zealand dollar was last up 0.38% at

$0.60245, while sterling rose 0.3% to $1.3642.

China's yuan briefly weakened to a two-week low

against the dollar on renewed investor worries over U.S.

tariffs, but it recouped early losses after major state-owned

banks stepped in to support the currency.

(Additional reporting by Yoruk Bahceli in London and Rae Wee in

Singapore; Editing by Kim Coghill, Sam Holmes and Christian

Schmollinger)