The Australian Dollar/Japanese Yen (AUD/JPY) pair remains stable around 97.00 during Asian trading hours on Thursday, following gains over the past three sessions. The Australian Dollar (AUD) found support after Australia’s Consumer Inflation Expectations rose to 4.6% in February, up from 4.0% in January.
Despite this momentum, the upside for AUD/JPY may be limited by growing concerns over a potential global trade war. Late Wednesday, the White House suggested that U.S. President Donald Trump might announce his reciprocal tariff plan before meeting Indian Prime Minister Narendra Modi on Thursday, according to CNBC. Trump has recently indicated his intention to impose tariffs on all nations that levy import duties on the United States.
Meanwhile, the Japanese Yen (JPY) gained strength following the release of stronger-than-expected Producer Price Index (PPI) data, reinforcing expectations of further rate hikes by the Bank of Japan (BoJ). Japan’s PPI rose 4.2% year-over-year in January 2025, surpassing market forecasts of 4.0% and accelerating from an upwardly revised 3.9% in December. This marks the 47th consecutive month of producer inflation and the highest reading since May 2023.
On a monthly basis, producer prices increased by 0.3%, in line with estimates but slightly lower than December’s 0.4% rise. The data signals persistent inflationary pressures in Japan, further bolstered by recent wage growth figures, strengthening the case for additional BoJ rate hikes.
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