- The AUD/JPY gains ground as the solid Australian economic data and the improvement of the global feeling boost the demand of the Australian dollar.
- The China Ministry of Foreign Affairs criticized the US approach in commercial conversations, emphasizing that significant progress depends on a dialogue based on equality.
- The Japanese yen weakened as the appetite for the risk improved, after Trump’s support for the president of the Fed, Jerome Powell, which reduced the demand for safe refuge.
The AUD/JPY breaks a three -day run streak, quoting around 90.90 during the European session on Wednesday. The crossing of currencies finds support as the resilient Australian economic data and the optimistic global feeling increase the demand of the Australian dollar (AUD), despite the caution comments of the Chinese Ministry of Foreign Affairs.
The Aud/JPY crossing maintains profits since the comments of the Chinese Ministry of Foreign Affairs failed to dissuade Aud buyers. In response to the comments of the president of the US, Donald Trump, on Commerce with China, the China Ministry of Foreign Affairs criticized the Washington approach, emphasizing that true progress requires a dialogue based on equality and mutual benefit. Trump adopted an optimistic tone, stating that commercial conversations with China, Australia’s main business partner, were advancing. He clarified that although the tariffs would not be as extreme as 145%, they would not lift completely either.
The Aud obtained more strength from the preliminary data of April of the Purchasing Managers Index (PMI) of the Judo Bank of Australia, which indicated that the private sector expanded for the seventh consecutive month. Although the manufacturing PMI decreased slightly to 51.7 (from 52.1 in March) and the PMI of services dropped to 51.4 (from 51.6), both sectors were maintained in expansion territory, underlining a constant economic impulse.
The Japanese Yen (JPY), on the other hand, weakened as the appetite for the risk after Trump’s reaffirmed support to the president of the Federal Reserve (Fed), Jerome Powell, reducing the demand for safe refuge. The US Treasury Secretary, Scott Besent, added to the optimistic tone, qualifying commercial tensions between the US and China as “unsustainable” and expressing confidence in a resolution.
In the Japanese data front, the impact of mixed preliminary PMI was limited. The PMI composed of the Jibun Bank rose to 51.1 in April from 48.9, pointing out a new expansion. The PMI of Services improved to 52.2 from 50.0, supported by an increase in new orders and orders from abroad, while the manufacturing PMI rose slightly to 48.5, continuing a ten -month contraction streak. The hopes of an interim commercial agreement between the US and Japan also raised the feeling.
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.
