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Trump unveils 25% tariffs on Japan, South Korea

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Japan's yen struggles to recover from losses

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RBA leaves rates unchanged, sends Aussie jumping

(Updates to Asia afternoon)

By Rae Wee

SINGAPORE, 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.

In Australia, the Aussie surged 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 announcement rattled investors and left the mood

downbeat in Asia on Tuesday.

The yen fell to a two-week low to 146.44 per

dollar early in the session before recovering some losses.

The Japanese currency also sank to a one-year trough

against the euro and hit its lowest against the

British pound in eight months.

Prime Minister Shigeru Ishiba said on Tuesday that he

would

continue

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

trade deal.

"The Japanese government is expected to continue tariff

negotiations, but with the Upper House election scheduled for

July 20, the bar for reaching an agreement within the month

appears high," said economists at Morgan Stanley MUFG

Securities.

The South Korean won fared better than its

Japanese counterpart, rising 0.7% to 1,366.35 per dollar,

recovering from its 1% fall on Monday.

South Korea said it

planned

to intensify trade talks with the United States.

"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."

Other currencies, meanwhile, gained some ground on Tuesday,

after sliding in the prior session when the dollar rebounded.

The euro was up 0.34% to $1.1747 after having slid

0.67% on Monday, while sterling edged up 0.24% to

$1.3635.

The European Union will not receive a letter from the United

States setting out higher tariffs, EU sources familiar with the

matter told Reuters on Monday, and is eyeing possible exemptions

from the U.S. baseline levy of 10%.

Against a basket of currencies, the dollar last stood

at 97.29, holding to some of its 0.5% gain from the previous

session.

RBA STUNS MARKETS

The Aussie last traded 0.8% higher at $0.6544,

having advanced more than 1% in a knee-jerk reaction to the

RBA's decision to stand pat on rates.

The move came as a shock for markets that had

confidently wagered on a cut, with the central bank saying that

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

information" to confirm that inflation was slowing.

A monthly inflation report had the closely-watched

trimmed mean measure hitting 2.4% in May, a 3-1/2 year low and

coming under the midpoint of the target band of 2-3%. That

prompted many economists to bring forward their rate cut call to

July from August.

The labour market, however,

remained resilient

, which argues against the RBA rushing into stimulatory

policy settings. The unemployment rate has been hovering at 4.1%

for over a year now.

Elsewhere, the New Zealand dollar was last up

0.32% at $0.6021.

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.