AUD/JPY slips as Trump’s tariff fears weigh on the aussie dollar
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AUD/JPY has dropped to 101.60 in early European trading, pressured by concerns over Trump’s proposed tariffs on China. However, a hawkish Reserve Bank of Australia (RBA) stance and Japan's domestic economic struggles could help limit further downside for the cross.
AUD/JPY Pressured by U.S.-China Tariff Concerns
The AUD/JPY pair saw a pullback on Friday as market jitters around Trump’s proposed tariffs on Chinese goods weighed on the Australian Dollar (AUD). Given Australia’s strong trade ties with China, increased tariffs on Chinese exports could have ripple effects on Australian exports, adding pressure to the AUD. The AUD/JPY pair, which climbed in the previous session, now hovers around 101.60 as investors adjust to the potential impacts on global trade.
RBA’s Hawkish Tone Supports Aussie Despite Headwinds
Despite tariff-related concerns, the Australian Dollar's losses could be cushioned by a hawkish outlook from the Reserve Bank of Australia (RBA). On Tuesday, RBA Governor Michele Bullock underscored the importance of keeping monetary policy restrictive in the face of persistent inflation risks and a robust labor market. While the central bank held the Official Cash Rate (OCR) steady at 4.35% for the eighth consecutive meeting, this stance suggests that the RBA remains vigilant on inflation and ready to take action if needed. This hawkish sentiment could support the AUD and limit its downside.
Japanese Yen Finds Support Amid Government Intervention Signals
The Yen has found some strength from Japanese officials’ cautious stance on Trump’s policies. Japan’s Finance Minister Katsunobu Kato highlighted the need for stability in currency markets, signaling a potential intervention if volatility spikes. Additionally, Japan’s economic fundamentals present their own challenges, with real wages and household spending declining for a second month in September. This could reduce inflation expectations and potentially delay the Bank of Japan’s (BoJ) anticipated rate hikes, thereby tempering gains for the Yen.
Outlook and Key Levels for AUD/JPY
The AUD/JPY cross faces mixed influences, with the Australian Dollar grappling with trade-related pressures and the Yen supported by Japanese officials’ concerns over policy impacts. Key support for the pair is seen at 101.00, with resistance around 102.20. Market sentiment will likely remain cautious as traders assess the potential impacts of U.S.-China tariffs on global trade and Australia’s economy.
AUD/JPY Pressured by U.S.-China Tariff Concerns
The AUD/JPY pair saw a pullback on Friday as market jitters around Trump’s proposed tariffs on Chinese goods weighed on the Australian Dollar (AUD). Given Australia’s strong trade ties with China, increased tariffs on Chinese exports could have ripple effects on Australian exports, adding pressure to the AUD. The AUD/JPY pair, which climbed in the previous session, now hovers around 101.60 as investors adjust to the potential impacts on global trade.
RBA’s Hawkish Tone Supports Aussie Despite Headwinds
Despite tariff-related concerns, the Australian Dollar's losses could be cushioned by a hawkish outlook from the Reserve Bank of Australia (RBA). On Tuesday, RBA Governor Michele Bullock underscored the importance of keeping monetary policy restrictive in the face of persistent inflation risks and a robust labor market. While the central bank held the Official Cash Rate (OCR) steady at 4.35% for the eighth consecutive meeting, this stance suggests that the RBA remains vigilant on inflation and ready to take action if needed. This hawkish sentiment could support the AUD and limit its downside.
Japanese Yen Finds Support Amid Government Intervention Signals
The Yen has found some strength from Japanese officials’ cautious stance on Trump’s policies. Japan’s Finance Minister Katsunobu Kato highlighted the need for stability in currency markets, signaling a potential intervention if volatility spikes. Additionally, Japan’s economic fundamentals present their own challenges, with real wages and household spending declining for a second month in September. This could reduce inflation expectations and potentially delay the Bank of Japan’s (BoJ) anticipated rate hikes, thereby tempering gains for the Yen.
Outlook and Key Levels for AUD/JPY
The AUD/JPY cross faces mixed influences, with the Australian Dollar grappling with trade-related pressures and the Yen supported by Japanese officials’ concerns over policy impacts. Key support for the pair is seen at 101.00, with resistance around 102.20. Market sentiment will likely remain cautious as traders assess the potential impacts of U.S.-China tariffs on global trade and Australia’s economy.