- The AUD/JPY rises due to the improvement of the feeling of risk after the extension by President Trump of the 50% tariff period on EU imports.
- The Aud continues to receive support for the renewed optimism around a 90 -day commercial truce between the US and China.
- The JPY can limit its fall since it is widely expected that Japan closes a commercial agreement with the United States soon.
The AUD/JPY extends its profits for the second consecutive day, quoting around 93.00 during the European hours of Monday. The feeling of risk improves after US President Donald Trump extended the 50% tariff term on the European Union (EU) from June 1 to July 9. On Friday, Trump threatened in a publication in Truth Social with imposing tariffs on imports from the European Union. The decrease in the commercial war between the US and the EU has supported the Australian dollar (AUD), while undermining the Japanese Yen (JPY) of safe refuge, and acts as an impulse for the crossing of currencies.
The AD gains support in front of its peers in the middle of the renewed optimism around a 90 -day commercial truce between the US and China and the hopes of more commercial agreements with other countries. However, the Bank of the Australian Reserve will closely monitor the additional developments in commercial negotiations between the US and China, since China is an important commercial partner of Australia.
The bullish potential of the Aud/JPY crossing could be restricted since the governor of the Bank of the Australian Reserve (RBA), Michele Bullock, supported the reduction of interest rates of 25 basic points last week and mentioned that the Central Bank is prepared to take additional measures if the economic perspectives deteriorate drastically, increasing the possibility of future reductions of rates.
In addition, the Japanese Yen (JPY) will regain ground with the hope that Japan will achieve a commercial agreement with the United States. On Sunday, it is expected that the main commercial negotiator of Japan, Ryosei Akazawa, advances in tariff negotiations with the US during a June meeting between President Trump and Japanese prime minister Shigeru Ihiba, according to Bloomberg.
The JPY received support from the growing acceptance that the Bank of Japan (BOJ) will continue to increase interest rates after the publication of inflation figures to the highest consumer than expected in Japan on Friday.
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.
