In Asian trading on August 7, 2025, tariffs were the focus. China reported a 7.2% year-on-year increase in USD-denominated exports for July, surpassing the anticipated 5.4%. The People’s Bank of China set the USD\/CNY reference rate at 7.1345. Meanwhile, Saudi Arabia increased oil prices for Asia amid tight supply and expected Indian demand growth. <\/p>\n
During the session, the U.S. announced plans to impose a 15% tariff on all imports from Japan, impacting the yen. USD\/JPY spiked to above 147.50 and stabilised later. This applied to existing tariffs regardless of previous rates. Additionally, reports suggested 100% tariffs on chips and semiconductors, but exemptions were possible for U.S. manufacturing investments. Companies like Apple and TSMC secured exemptions, boosting their share prices.<\/p>\n
In broader market news, the Nikkei 225 rose by 0.7%, the Hang Seng by 0.3%, while the S&P\/ASX 200 declined by 0.2%. Fed officials continued to suggest potential rate cuts, consistent with comments from San Francisco Fed President Mary Daly. The currency market remained stable apart from the yen, which was affected by tariff news.<\/p>\n
Given the sharp drop in the yen following the tariff news, we should expect continued weakness. With USD\/JPY breaking above 147.50, traders should consider buying call options on the pair to capitalize on further upside. The last time we saw such direct political pressure on the Japanese economy was decades ago, and it signals a major policy shift that the market is just beginning to price in.<\/p>\n
The new tariff policy is creating a clear split between winners and losers in the tech sector. We see that the PHLX Semiconductor Index (SOX) has diverged, with companies securing exemptions like Apple and TSMC outperforming. Derivative traders can play this by purchasing call options on these favored names while considering put options on competitors that have a smaller US manufacturing footprint and are more exposed to the 100% chip tariff.<\/p>\n
Federal Reserve officials are clearly signaling that rate cuts are coming soon. The CME FedWatch Tool is now pricing in an 85% probability of a rate cut at the September 2025 meeting, up from just 50% two weeks ago. To position for this, traders could look at futures contracts tied to the SOFR, which will gain in value as interest rates fall.<\/p>\n
Overall market volatility is on the rise, with the VIX index jumping from the low teens to over 22 in just the past month. The unpredictable nature of these tariff announcements means headline risk is extremely high. Buying out-of-the-money put options on the S&P 500 or call options on the VIX itself can provide a cost-effective hedge against a sudden market downturn.<\/p>\n
Energy markets are showing signs of tightening supply, as seen with Saudi Arabia raising prices and recent inventory data from the EIA showing a larger-than-expected draw. With BP forecasting strong demand, we can anticipate firm oil prices through the end of the year. Traders can gain upside exposure by purchasing call options on WTI crude futures.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" China’s exports surge, U.S. tariffs hit Japan, oil prices rise, tech exemptions boost Apple, TSMC shares.<\/p>\n","protected":false},"author":62,"featured_media":17027,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-28442","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=28442"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28442\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17027"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=28442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=28442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=28442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}