AUD/JPY surges to near 94.50 as joint statement confirms 90-day halt in tariff escalations

• AUD/JPY climbs amid renewed global trade optimism following encouraging progress in US-China trade talks.
• A joint statement confirmed the US will suspend 24 percentage points of tariffs on Chinese goods for an initial 90-day period.
• Japan's Current Account surplus increased to JPY 3,678.1 billion in March, up from JPY 3,447.8 billion a year earlier.

AUD/JPY climbed more than 1.50% during European trading hours on Monday, reaching around 94.60, driven by a more optimistic global trade sentiment following positive developments in US-China trade negotiations.

The Australian Dollar (AUD), closely tied to China due to strong trade relations, gained ground after the release of a joint statement from high-level talks held over the weekend in Geneva, Switzerland. The statement confirmed that the United States would suspend 24 percentage points of its tariff rate on Chinese goods for an initial 90-day period.

At a scheduled briefing, US Treasury Secretary Scott Bessent highlighted the importance of the agreement, pointing to a 90-day halt in tariff escalations and a significant 115% reciprocal reduction in tariffs. He emphasized the constructive rapport between the two sides and their focus on advancing national interests.

Echoing similar sentiments, US Trade Representative Jamieson Greer praised the mutual respect and understanding achieved during the discussions. He acknowledged that while both sides are committed to the 90-day pause, challenges such as the fentanyl issue remain unresolved.

Meanwhile, the Japanese Yen (JPY) weakened as the positive trade news dampened demand for safe-haven assets. However, downside pressure on the JPY may be limited following Japan's latest Current Account data.

Japan posted a non-seasonally adjusted current account surplus of JPY 3,678.1 billion in March, up from JPY 3,447.8 billion a year earlier and broadly in line with expectations. Trade Balance - BOP Basis reported that goods account surplus widened to JPY 516.5 billion from JPY 463.5 billion, supported by a 1.8% year-on-year rise in exports, which outpaced the 1.3% increase in imports.

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