- The AUD/JPY is firmly negotiated about 94.50, since investors see the rates of the BOJ features postponed until the beginning of 2026.
- The Japanese ishiba warns that the highest indebtedness costs could hinder government spending plans.
- The Australian dollar fails to capitalize on the positive result of commercial conversations between the US and China.
The Aud/JPY pair maintains its recovery of four days about 94.50 during Wednesday’s Asian negotiation hours. The crossing exhibits strength as investors begin to doubt whether the Bank of Japan (BOJ) will increase interest rates this year again.
On Monday, Japan Prime Minister Shigeru Ihiba cited concerns about the increase in interest rates on the part of the Boj, warning that they could hinder Tokyo’s expense plans. The PM ishiba declaration occurred at a time when Japan’s economic perspectives have become uncertain due to the repercussions of the tariff policy of the president of the United States (USA), Donald Trump.
A reuters survey in the period from June 2 to 10 showed that a slight majority of economists expects the BOJ to maintain stable interest rates at 0.5% by the end of the year. The survey also showed that none of the economists expected the Japanese Central Bank to increase its reference interest rate in the next week’s monetary policy announcement.
On the contrary, the governor of the BOJ, Kazuo Ueda, has kept the door open for greater hardening of interest rates policy if officials are convinced that underlying inflation moves around 2%.
Meanwhile, the Australian dollar (AUD) exhibits slow yield even though Washington and Beijing have reached a “frame” to execute the commercial agreement made in Geneva last month. However, the framework needs to be approved by both the president of the United States (USA), Donald Trump, and by Chinese leader Xi Jinping.
A positive result of two -day commercial conversations between the US and China is favorable for the Australian dollar, since the Australian economy depends largely on its exports to Beijing.
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
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.
