In Tokyo, traders returned to safe-haven currencies like the yen and Swiss franc while selling off the Australian dollar on Thursday. This move was in response to U.S. President Donald Trump escalating his trade war with China, despite temporarily delaying tariffs on other nations for 90 days.

Safe-haven currencies saw a surge after Trump decided to put a temporary halt on imposing reciprocal duties, which had previously caused significant market turmoil. Despite this, Asian stock markets experienced a rally, contributing to the rise in risk-sensitive currencies.

Trump maintained a 10% tariff rate while increasing tariffs on Chinese imports to 25%, intensifying concerns about the long-term impact on economic growth and the uncertainty surrounding his trade policies.

Analysts expressed skepticism about the U.S.'s global standing and the fairness of the U.S. dollar's valuation against other currencies. The Chinese yuan experienced slight fluctuations in offshore trading, reflecting the market's volatile reactions.

U.S. Treasury Secretary Scott Bessent claimed that the tariff pause was strategic to facilitate negotiations, suggesting that market reactions had influenced Trump's decision-making process. Market analysts noted a loss of confidence in the U.S. government among investors due to the ongoing trade tensions.

The U.S. dollar depreciated against the yen and Swiss franc, while the euro saw a modest increase. The Australian dollar declined following Trump's trade announcements, despite a temporary rebound earlier in the session.