- The AUD/JPY advances as Japanese is weakened, driven by the reduction of the demand for safe refuge assets.
- President Trump pointed out his willingness to reduce tariffs on Chinese goods, while Beijing has announced exemptions for selected imports from the United States.
- The decala in commercial tensions is also supporting the Australian dollar linked to raw materials.
The AUD/JPY gains ground after registering losses of more than 0.50% in the previous session, quoting around 91.50 during the European hours on Tuesday. The torque is winning as Japanese weakens, with the demand for traditional shelter assets decreasing in a renewed optimism about commercial relations between the US and China.
The US President Donald Trump has indicated his willingness to reduce tariffs on Chinese products, while Beijing has granted exemptions for certain US imports that were previously subject to their 125%tariffs. These developments have raised the hopes of a resolution to the prolonged commercial conflict between the two greatest economies in the world.
Given the strong commercial relationship between Australia and China, the relaxation of commercial tensions between the US and China could provide support to the Australian dollar (AUD) linked to raw materials. Market attention is now moving towards the Australian inflation report, which will be published on Wednesday, and that could shape expectations on future policy movements of the Bank of the Australian Reserve (RBA). It is widely anticipated that the RBA will make a rate cut of 25 basic points in May, since it prepares for possible economic repercussions of the recent US tariffs.
Meanwhile, the Bank of Japan (BOJ) is ready to announce its policy decision on Thursday, with expectations that rates remain unchanged in the midst of concerns about the fragile domestic economy. However, signs of expanding inflation could leave the door open for future hardening. A rapid commercial agreement between the US and Japan could further increase the confidence of the BOJ to consider rates rises, marking a strong contrast with the growing belief that slow global growth could push the Federal Reserve towards clippings of deeper rates.
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.