• USD/JPY tumbles as the US Dollar falls back after a stellar opening.
• US Trump threatens to raise tariffs on Canada and Mexico for providing passage to China to supply illicit drugs in the US economy.
• Investors await the US PCE inflation and the Tokyo CPI data for October.

The USD/JPY pair tumbles to near 153.00 in Tuesday’s North American session. The asset plummets as the US Dollar (USD) gives up its entire intraday gains and turns negative after a strong opening. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls to near 106.50 after a strong opening around 107.50.

The Greenback had a stellar opening after United States (US) President-elect Donald Trump threatened to impose 25% tariffs on Canada and Mexico for providing China a freeway to supply illicit drugs to the United States (US), said in a tweet on Truth.Social. For that, Trump also announced to levy additional 10% tariffs over China above 60%, which he already mentioned in the election campaign.

However, the US Dollar falls back as investors remain confident that Scott Bessent, Trump’s nomination for Treasury Secretary, will maintain political steadiness despite fulfilling the Trump’s economic agenda. Bessent said in an interview with Financial Times (FT) over the weekend that Trump’s policies will not boost inflationary pressures.