- The AUD/JPY depreciates, driven by spending data of the stronger Japanese households than expected, which indicates a possible rebound in internal consumption.
- The total expenditure of households in Japan increased by 2.1% year -on -year in March, exceeding market estimation of a 0.2% increase.
- The Australian dollar finds additional support since China reported a commercial surplus greater than expected of 96.18 billion dollars in April.
The AUD/JPY goes back from its recent profits during the European negotiation hours on Friday, around the level of 93.10. The Japanese Yen (JPY) is strengthening, supported by national data that shows an increase in personal spending for March stronger than expected, an encouraging signal for consumption. However, concerns persist since real wages continue to decrease, clouding the broader economic perspective of Japan.
The total expenditure of households in Japan increased by 2.1% year -on -year in March, reversing a 0.5% drop in February and exceeding market forecast of a gain of 0.2%. This is the strongest growth since December, largely driven by the continuous increase in public services spending amid colder climatic conditions.
Japan’s work income grew by 2.1% year -on -year in March, slowing down from 2.7% in February and being below the expected 2.3%. Meanwhile, real wages, adjusted by inflation and considered a key indicator of purchasing power, fell 2.1%, marking the third consecutive month of decline.
Despite the pressure on the Aud/JPY crossing, the downward risk can be limited since the Australian dollar finds some support after the publication of China’s commercial data. Given Australia’s close commercial relationship with China, any improvement in Chinese economic indicators often helps to support the strength of the audience.
China registered a commercial surplus of 96.18 billion dollars in April, above the estimate of 89 billion dollars, but below 102.63 billion dollars in March. Exports increased by 8.1% year -on -year, well above the 1.9% forecast, although decreasing 12.4%, while imports fell only 0.2%, a remarkable improvement with respect to the expected -5.9% and -4.3% March. Meanwhile, China’s commercial surplus with the US was reduced to 20.46 billion dollars from 27.6 billion dollars in March.
Attention now focuses on preliminary commercial conversations between the US and China scheduled for this weekend in Switzerland. Expectations are still moderate, with both parties minimizing the perspectives of an advance. Former President Trump has reiterated a hard position towards China, highlighted for his appointment of a new envoy to Beijing. While discussions on tariff exemptions are being carried out, Trump declared that the US “is not looking for so many exemptions.”
In contrast, the Vice Minister of Foreign Affairs of China, Hua Chunying, expressed confidence in China’s ability to manage current commercial tensions, stating that the country remains resilient and fully capable of supporting external pressures.
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
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.
