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: 2025.07.02
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AUD/JPY rises to near 94.50 as Trump considers 35% tariffs on Japan
World FX news
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AUD/JPY rises to near 94.50 as Trump considers 35% tariffs on Japan
New
2025.07.02 14:07
2025.07.02 14:07
2025.07.02 14:07
- AUD/JPY appreciates as the Japanese Yen weakens amid uncertainty, with Trump considering additional tariffs of 30% or 35% on Japan.
- The Japanese Yen also faces challenges due to the BoJ's caution over interest rate hikes.
- Australia's Retail Sales rose by 0.2% MoM in May, against the expected 0.4% increase.
AUD/JPY retraces its recent losses registered in the previous session, trading around 94.50 during the Asian hours on Wednesday. The currency cross appreciates as the Japanese Yen (JPY) faces challenges following the recent comments from the US President Donald Trump.
President Trump hit the newswires on Tuesday, saying that he is considering adding additional 30% or 35% tariffs on Japan and not extending the self-imposed July 9 deadline on the currently-suspended reciprocal tariffs. Trump expressed his doubt on reaching a deal with Japan.
Additionally, the Bank of Japan (BoJ) adopt caution on unwinding its ultra-loose policy forced investors to delay their expectations for early interest rate hikes. The BoJ new board member Kazuyuki Masu emphasized on Tuesday that the central bank should not rush into raising interest rates given various economic risks.
Bank of Japan Governor Kazuo Ueda also noted that any future rate hikes will depend on the overall inflation dynamic, including wage growth and expectations. Ueda highlighted the headline inflation has been above 2% for nearly three years, underlying inflation remains below target.
However, the upside of the AUD/JPY cross could be restrained as the Australian Dollar (AUD) against its peers following the release of weaker-than-expected domestic economic data. The Australian Bureau of Statistics (ABS) showed that Retail Sales rose 0.2% month-over-month in May, compared to a flat 0% in April (revised from -0.1%). The reading came in below the market expectations of 0.4%. Meanwhile, Building Permits rose by 3.2% in May, as compared to the previous decline of 4.1%, but falling short of expected 4.8% increase.
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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.
Last updated
: 2025.07.02
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USD/JPY trades cautiously positive around 144.00 ahead of key US data
The USD/JPY pair edges higher to near 143.90 during European trading hours on Thursday. The pair trades cautiously higher as the US Dollar (USD) ticks up ahead of the United States (US) Nonfarm Payrolls (NFP) data for June, which will be published at 12:30 GMT.
New
2025.07.03 19:08AUD/USD: Expected to trade in a range of 0.6550/0.6595 - UOB Group
Australian Dollar (AUD) is expected to trade in a range of 0.6550/0.6595 against US Dollar (USD). In the longer run, should AUD break clearly above 0.6595, it could trigger a further rise toward 0.6620, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
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2025.07.03 18:56DXY: Eyes on payrolls, ISM services - OCBC
US Dollar (USD) traded mixed overnight, with losses seen vs. TWD, THB and precious metals but traded largely firmer against most currencies including GBP, AUD, NZD and MYR. DXY was last at 96.83 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
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2025.07.03 18:53GBP/USD: Likely to trade between 1.3585 and 1.3705 - UOB Group
Pound Sterling (GBP) is likely to trade in a range, probably between 1.3585 and 1.3705. In the longer run, week-long positive outlook has been negated; for a continued down-move, GBP must first close below 1.3560, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
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2025.07.03 18:40USD/CHF upside attempts remain limited below 0.7945 ahead of the US NFP report
The US Dollar is trading with marginal gains for the second consecutive day on Thursday, but it seems unable to put any significant distance from the 14-year lows hit earlier this week, with price action limited below 0.7945.Earlier on Thursday, Switzerland's Consumer Price Index data revealed an un
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2025.07.03 18:38USD: Too early to say we've reached 'peak bearishness' on the USD - ING
While forecasters are overwhelmingly bearish on the dollar now - and some are bearish on a multi-quarter basis too - one possible shoe still to drop is the possibility of early Fed rate cuts, ING's FX analyst Francesco Pesole notes.
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2025.07.03 18:31Silver price today: Silver rises, according to FXStreet data
Silver prices (XAG/USD) rose on Thursday, according to FXStreet data.
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2025.07.03 18:30AUD/JPY treads water above 94.50 due to signs of BoJ delaying rate hikes
AUD/JPY holds its positions for the second successive session, trading around 94.60 during the European hours on Thursday. The currency cross gains ground as the Japanese Yen (JPY) faces challenges, driven by the Bank of Japan (BoJ) adopting caution on interest rate hikes.
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2025.07.03 18:09EUR/GBP eyes 0.8735 after breakout - Société Générale
EUR/GBP is extending its uptrend after defending the 200-DMA in May and breaking above recent consolidation, with momentum indicators pointing higher. The pair eyes the April high at 0.8735 and projections near 0.8780, while support rests at 0.8585/0.8575, Société Générale's FX analysts note.
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2025.07.03 17:56Disclaimer:
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