The AUD/JPY currency pair remains relatively steady, trading around 96.80 during Asian trading hours amid a broader positive momentum initiated in late August. Recent economic data from Australia has bolstered the Australian Dollar, with the nation reporting a significantly wider trade surplus for July. The trade balance increased to 7.31 billion AUD, notably higher than the forecasted 4.92 billion AUD, defying expectations of a decline. Australia’s exports grew by 3.3% on a month-over-month basis, while imports declined by 1.3%, contributing to the surplus expansion. These figures suggest resilient external demand and support the Australian currency’s recent appreciation.
Furthermore, Australia’s second-quarter GDP growth surpassed expectations, expanding by 0.6% quarter-over-quarter and 1.8% annually. These robust figures, combined with the trade surplus, have tempered expectations of additional rate cuts by the Reserve Bank of Australia. Financial markets now assign a near 90% probability that the RBA will hold its policy rates steady at the upcoming September meeting, reflecting confidence in the economic outlook.
In Japan, the outlook remains cautiously optimistic. The Bank of Japan’s Governor Kazuo Ueda reaffirmed the central bank’s commitment to its current monetary policy, indicating that any adjustments to interest rates will depend on the trajectory of growth and inflation. Market participants are awaiting upcoming wage data, which could influence future policy directions.
Meanwhile, Japan’s trade negotiations continue between officials. Japan’s trade negotiator, Ryosei Akazawa, is currently in the United States, where discussions are advancing. Efforts are underway to secure presidential approval for tariffs that have already been agreed upon, reflecting ongoing diplomatic and economic exchanges.
Overall, the strength in Australia’s trade figures appears to support a firmer Australian Dollar, with the AUD/JPY likely to maintain its upward trajectory as economic fundamentals remain favorable. The currency pair’s recent stability underscores investor optimism amid improving trade and economic data from Australia, coupled with cautious, steady policy signals from Japan.
