Select Language

AUD/JPY rises above 94.00 as risk sentiment improves amid China's stimulus measures

Breaking news

AUD/JPY rises above 94.00 as risk sentiment improves amid China's stimulus measures

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.03.17 14:00
AUD/JPY rises above 94.00 as risk sentiment improves amid China's stimulus measures

update 2025.03.17 14:00

  • AUD/JPY advances after the release of key economic data from China on Monday. 
  • China announced plans featuring measures to boost wages and stabilize stock and real estate markets. 
  • The BoJ is expected to keep its current policy unchanged at its upcoming meeting on Wednesday.

AUD/JPY continues to gain ground for the second successive day, trading around 94.20 during the Asian hours on Monday. The currency cross appreciates as the Australian Dollar (AUD) gains ground against its peers following the release of China's economic data on Monday. Any developments surrounding the Chinese stimulus plan could boost the AUD, as China is a major trading partner to Australia.

China's retail sales grew by 4% year-over-year in January-February, improving from December's 3.7% increase. Meanwhile, industrial production rose 5.9% YoY during the same period, exceeding the 5.3% forecast but slightly lower than the previous reading of 6.2%.

The risk-sensitive AUD/JPY cross receives support as the Australian Dollar gains ground and the Japanese Yen (JPY) loses ground amid improving risk sentiment as China unveiled a special action plan over the weekend to revive consumption. The plan includes measures to increase wages, boost household spending, and stabilize stock and real estate markets.

However, the AUD/JPY cross may face upside limitations as the JPY could strengthen amid firm expectations that the Bank of Japan (BoJ) will continue raising interest rates this year. Still, the central bank is widely anticipated to maintain its current policy at its upcoming meeting on Wednesday.

Last week, major Japanese firms agreed to substantial wage increases for the third consecutive year, aiming to support workers against inflation and address labor shortages. Higher wages are expected to drive consumer spending, fuel inflation, and give the BoJ more flexibility for future rate hikes.

Interest rates FAQs

Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.

Higher interest rates generally help strengthen a country's currency as they make it a more attractive place for global investors to park their money.

Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.

The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.

 


Date

Created

 : 2025.03.17

Update

Last updated

 : 2025.03.17

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

GBP/USD: GBP must break and stay above 1.3000 to continue to rise - UOB Group

Chance for Pound Sterling (GBP) to break above 1.3000 vs US Dollar (USD); overbought conditions suggest it might not be able to maintain a foothold above this level.
New
update2025.03.18 17:50

DXY: Consolidate ahead of FOMC - OCBC

US Dollar (USD) continues to trade near recent lows. DXY was last seen trading at 103.26 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
New
update2025.03.18 17:42

USD: Consumer pessimism still growing - ING

US data continues to haunt the dollar, which fell against all G10 currencies excluding the yen yesterday.
New
update2025.03.18 17:39

EUR/USD: Above 1.0855, the pair can test 1.0950 - UOB Group

Euro (EUR) could test 1.0950 vs US Dollar (USD), but it does not appear to possess enough momentum to break clearly above this level.
New
update2025.03.18 17:27

USD/CAD Price Forecast: Falls toward 1.4250 after breaking below a crucial support zone

USD/CAD continues its losing streak for the third successive session, trading near 1.4290 during European hours on Tuesday.
New
update2025.03.18 17:24

EUR: Bundestag widely expected to approve spending - ING

The German Bundestag votes on Friedrich Merz's fiscal spending plan today, ING's FX analyst Francesco Pesole notes.
New
update2025.03.18 17:20

EUR/USD: May correct lower on the day - OCBC

Euro (EUR) continued to hold on to gains above 1.09 handle vs US Dollar (USD) on prospects of a peace deal in Ukraine, potential ECB pause (in Apr) and hopes of large German spending.
New
update2025.03.18 17:17

Swiss economy will grow by 1.4% in 2025 - SECO

In its March economic forecasts, Switzerland's State Secretariat for Economic Affairs (SECO) said that the "Swiss economy will grow by 1.4% in 2025." Additional takeaways Sees 2025 GDP (sport event adjusted) growth at +1.4% (previous forecast was +1.5%).
New
update2025.03.18 17:09

Canada Inflation Preview: CAD gains ahead of February CPI release

Statistics Canada will release the February inflation report on Tuesday, as estimated by the Consumer Price Index (CPI).
New
update2025.03.18 17:00

EUR/USD shows resilience ahead of German debt vote, US-Russia peace talks

EUR/USD trades firmly near the five-month high of 1.0950 in Tuesday's European session ahead of voting on the German debt restructuring deal in the Bundestag lower house of Parliament.
New
update2025.03.18 16:56

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel