- The Aud/JPy loses ground as the Japanese yen can be seen behind the most solid underlying inflation of Tokyo.
- The JPY receives support from the safe refuge claim after the decision of the Federal Court of the US that allows Trump tariffs to enter into force.
- Australian retail sales fell 0.1% intermensual in April, compared to the expected growth of 0.3%.
The AUD/JPY extends its losses for the second consecutive day, quoting around 92.50 during the Asian hours of Friday. The crossing of currencies is depreciated almost 0.50% as the Japanese yen (JPY) gains ground in front of their peers after the underlying inflation data of Tokyo that were stronger than expected. The optimistic data reinforced the expectations of an increase of 25 basic points at the Bank rate of Japan (BOJ) in July.
On Friday, the General Consumer Price Index (CPI) of Tokyo rose 3.4% year -on -year in May, compared to 3.5% of the previous month. Meanwhile, the underlying IPC of Tokyo, excluding fresh foods, stood at 3.6% year -on -year, after an increase of 3.4% in April. The index has exceeded the medium forecasts of the market of an increase of 3.5%.
The Aud/JPY cross loses ground as the demand for safe refuge for the JPY is strengthened after the decision of the US Court of Appeals for the Federal Circuit in Washington, which on Thursday temporarily allowed Trump’s tariffs to enter into force.
On Wednesday, a panel of three judges in the International Trade Court in Manhattan condemned the use by Trump of the Law on International Emergency Emergency Powers (IEEPA) of the Carter era to justify its international agenda, citing it as an exploitation of the president’s authority. The Federal Court determined that Trump exceeded his authority by imposing broad import tariffs and declared that the executive orders issued on April 2 were illegal.
In addition, the Aud/JPY crossing depreciates as the Australian dollar (Aud) fights after the publication of Australian retralist sales adjusted seasonally, which fell 0.1% intermensual in April, compared to the expectations of staying consistent with a growth of 0.3%. Meanwhile, monthly construction permits fell by 5.7%, compared to the expected increase of 3.1%.
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.
