- The Aud/JPY weakens as uncertainties related to trade and geopolitical tensions continue to boost the demand of Japanese for sure refuge.
- The support for the JPY is further reinforced by the growing expectations that the Boj will raise interest rates again in 2025.
- The Australian dollar finds some support as the feeling of investors towards US assets softens.
The Aud/JPY continues in Declive for third consecutive session, around 90.10 during the European negotiation hours on Tuesday. The persistent uncertainties related to trade and geopolitical tensions are reinforcing the demand for refuge assets such as Japanese Yen (JPY), pressing the crossing down. In addition, the growing expectations that the Bank of Japan (BOJ) could increase interest rates again in 2025 are providing greater support to JPY.
Japan Economy Minister Ryosei Akazawa reiterated on Tuesday the position of Prime Minister Shigeru Ihiba, emphasizing that agriculture will not be compromised to protect the automotive industry in the current conversations about tariffs with US tariff US Treasury Secretary, Scott Besent, to discuss monetary policy.
In its quarterly report on regional economic conditions, the Japanese government maintained its general perspective, but pointed out the growing downward risks linked to US commercial policy, according to the Xinhua news agency.
However, the downward impulse in the AUD/JPY can be limited as the Australian dollar (AUD) obtains support in the middle of winds against the US dollar (USD). The feeling of investors towards US assets has weakened after the renewed criticisms of President Donald Trump towards the president of the Federal Reserve, Jerome Powell, which has generated concerns about the independence of the Fed.
The Economic Advisor of the White House, Kevin Hassett, said Friday that Trump is exploring if he can fire Powell, while Trump warned in social truth that economic growth could stagnate unless interest rates are reduced. The feeling of the market is still fragile as global trade negotiations remain at a dead point. China’s firm position in response to the aggressive Trump tariff measures continues to weigh on investor’s confidence.
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
