- AUD/JPY progressed along with the movement of emotion following a modified optimization surrounding the US-China trade relations.
- Top diplomats from the US and China are scheduled to meet in Switzerland on May 10 to reign the stuck negotiations.
- The AUD receives support from optimism around a potential success in US-China trade conversations.
AUD/JPY snapped a three-day loss of stripes and traded around 92.90 during Europe on Thursday, which was strengthened by demanded demand for safe properties such as Japanese Yen (JPY). The transfer of emotions follows the modified optimization surrounding US-China trade relations, along with US Treasury Secretary Scott Bescent who is set to meet China's leading economic economic officer in Switzerland on May 10 to reign stuck negotiations.
The investor's confidence has also received assistance from US President Donald Trump, who has indicated a significant announcement in the trade deal. “Big News Conference tomorrow at 10:00 AM, the Oval Office, about a major trade deal with representatives of a large, and highly respected, country. The first of many !!!” He posted Wednesday night. This upbeat rhetoric weighs JPY by reducing the flow of safe flow.
Meanwhile, the Bank of Japan (BOJ) released minutes from the meeting on March 18-19, indicating the policy willingness to continue to increase interest rates if economic and inflation targets were met. However, members have expressed caution, citing elevated risks from emerging US policies. BoJ Governor Kazuo Ueda also highlights the uncertainty around the rising prices of food and its impact on inflation, which states the bank will continue to monitor these factors.
Supporting the Australian dollar (AUD), optimizing around a potential success in US-china-critical trade talks for the economy driven by Australian export-has increased emotions. Further support comes from the People's Bank of China (PBOC) plan to cultivate major lending rates and reduce banks' reserve requirements to stimulate growth.
Australian's Australian industry index has improved in April, although it still marked the 33th consecutive months of retreat, especially in the manufacturing sectors tied to exports. These economic conditions have strengthened expectations that the Reserve Bank of Australia (RBA) could lower the cash rate by 25 basis points to 3.85% later this month.
