- The Aud/JPY continues to weaken as Japanese is strengthened in the midst of growing expectations of increased boxwood increases.
- Ueda del Boj said they are maintained on the table more increases in fees, provided that inflation trends align with bank projections.
- The PBOC chose to maintain its LPRs without changes, keeping the rates at one year five years at 3.10% and 3.60%, respectively.
The Aud/JPY pair extends its decline per second consecutive session, around 90.40 during the European negotiation hours on Monday. The Japanese Yen (JPY) continues to strengthen himself, supported by the growing expectations that the Bank of Japan (Boj) will persist with its increases in interest rates.
The governor of the Boj, Kazuo Ueda, recently declared that the real interest rates of Japan are still very low and indicated that the Central Bank could continue to increase rates if economic and pricing conditions evolve as projected. His feeling was backed by the Boj Board member, Junko Nagakawa, reinforcing the market expectations of greater hardening.
Meanwhile, the feeling of risk remains fragile amid the concerns about the fluctuating position of US President Donald Trump regarding tariffs. The last White House movement to impose tariffs on Chinese ships that dock in US ports has raised the fears of interruptions in global maritime transport, increasing the demand for traditional assets of safe refuge such as Yen.
However, losses at the Aud/JPY crossing can be limited since the Australian dollar (AUD) finds support after the decision of the Popular Bank of China (PBOC) to maintain its preferential loan rates, maintaining the rate at one year at 3.10% and the five -year of 3.60%.
The Australian dollar also obtained the strength of market concerns about the broader economic impact of American tariffs. In addition, the feeling improved after Trump’s announcement about exemptions for key technological products, many of which are manufactured in China, Australia’s largest commercial partner and an important buyer of its exports of raw materials.
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
