- AUD/JPY gains ground as RBA expects to increase policy rates if inflation doesn’t return to the 1%-3% range.
- The Australian Dollar gained support as Trade Surplus widened A$6,548 million (US$4,321.68 million) in May.
- Japan’s GDP Annualized showed that Japan’s economy contracted by 1.8% in Q1, against the expected decline of 2.0%.
AUD/JPY retraces its recent losses, trading around 103.50 during the European session on Monday. The Australian Dollar (AUD) gains ground due to the hawkish sentiment surrounding the Reserve Bank of Australia (RBA). Last week, RBA Governor Michele Bullock indicated that the central bank is prepared to increase interest rates if the Consumer Price Index (CPI) does not return to the target range of 1%-3%, according to NCA NewsWire.
The Australian Dollar gained support as market sentiment improved following the country’s Trade Balance release on Friday. Australia’s Trade Surplus widened to A$6,548 million (US$4,321.68 million) in May, surpassing the expected A$5,500 million and April's balance of A$5,024 million. This improvement can be attributed to a 7.2% month-on-month plunge in imports in May, reversing April’s 4.2% increase, while exports fell by 2.5% following a previous decline of 0.6%.
Meanwhile, China’s imports rose by 1.8% year-on-year to USD 219.73 billion in May, missing market estimates of a 4.2% increase and significantly down from April's 8.4% rise. Any change in China's economy could impact the Australian market due to the close trade relationship between the two countries.
In Japan, the mixed data released on Monday could limit the downside of the Japanese Yen. The Gross Domestic Product (GDP) Annualized showed that Japan’s economy contracted less than expected in the first quarter. Japan’s GDP Annualized contracted by 1.8% in the first quarter, compared to a previous decline of 2.0%, slightly exceeding market forecasts of a 1.9% decrease. Meanwhile, GDP (QoQ) shrank by 0.5%, matching the flash data.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD climbs to multi-month high above 1.1000 on broad USD weakness
EUR/USD extends its rally to a fresh six-month high above 1.1000 in the European session on Thursday. The pair benefits from the intense selling pressure surrounding the US Dollar after US President Trump unveiled aggressive tariffs on the "Liberation Day." Markets await mid-tier US data releases.
GBP/USD jumps above 1.3100 ahead of US data
GBP/USD is extending its upbeat momentum above 1.3100 in European trading on Thursday as the US Dollar slumps to a fresh YTD low. Worries about a tariff-driven US economic slowdown lift Fed rate cut bets and weigh on the Greenback. The focus now remains on the US data for further impetus.
Gold price moves further away from all-time peak; downside potential seems limited
Gold price extends its steady intraday pullback from the all-time peak touched this Thursday, though it manages to hold above the $3,100 mark through the early European session. Bullish traders opt to take some profits off the table and lighten their bets around the commodity amid slightly overbought conditions.
Bitcoin price reacts as Gold sets fresh record highs after Trump’s reciprocal tariffs announcement
Bitcoin price plunges towards $82,000 as Gold soars past $3,150 after US President Donald Trump imposed new tariffs on Israel and UK, triggering global markets turbulence.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.