The AUD/JPY pair remains steady above 96.00, maintaining its recent gains despite rising concerns over U.S. trade policies. Investors continue to monitor escalating tensions as Donald Trump’s renewed tariff threats against major trading partners add uncertainty to global markets.
While the Australian dollar has benefited from stable commodity prices and a resilient domestic economy, its upside remains in check. Market sentiment remains cautious as traders assess potential repercussions of a trade war, particularly on risk-sensitive currencies like the Aussie and the yen, which typically sees safe-haven demand rise in times of uncertainty.
The Japanese yen, often sought as a hedge against global instability, has not seen significant appreciation yet, suggesting that markets are still in a wait-and-see mode. However, any further escalation in U.S.-China trade tensions or additional policy shifts from Trump could trigger risk aversion, pressuring AUD/JPY lower.
Adding to the cautious outlook, the Bank of Japan’s ultra-loose monetary policy continues to limit yen strength, keeping the currency relatively weak compared to higher-yielding assets. At the same time, Australia’s economic resilience and ties to Asian markets provide underlying support for the Australian dollar, preventing sharp declines for now.
Traders will be closely watching upcoming economic data and any developments in Trump’s trade policies for clearer direction. While AUD/JPY remains stable above 96.00, any signs of escalating trade disputes could shift momentum quickly, potentially favoring the yen as risk sentiment deteriorates.
