AUD/JPY decreases to nearly 95.50 with a decrease in trade surplus in Australia to the lowest level in three months

• Aud/JPY loses the Earth where the trade surplus in Australia decreased to 5,085 million in December, the smallest balance since last September.
• AUD faces challenges amid increasing feelings about RBA’s upcoming policy decision.
• The Japanese yen acquires strength as strong wages and data services enhances more honest BOJ expectations.

Aud/JPY extends its losses for the second day in a row, as it is circulated about 95.60 during the Asian hours on Thursday. This decrease in the cross is attributed to the AUD dollar (AUD) after the issuance of low trade balance data expected.

The trade surplus in Australia fell to 5,085 million in December, and it lost 7000 meters expected from the previous surplus of 6792 meters. This has been the smallest balance since last September. Exports increased by 1.1 % of MOM, slowing from 4.2 % in November, while imports increased by 5.9 % of MOM, up from 1.4 % in the previous month.

The weakest trade balance data in Australia enhance the circular feelings surrounding the decision of the upcoming Australian Reserve Bank policy (RBA). The central bank is widely expected in February. RBA has maintained the official cash price (OCR) by 4.35 % since November 2023, with the focus that inflation should return “sustainable” to its target scope by 2 % to 3 % before any policy reduction.

In addition, Cross Aud/JPY receives low pressure from risk morale amid increasing fears of trade tensions between the United States of China. China, the main trade partner in Australia, is participating against the new 10 % American tariff that entered into force on Tuesday. However, Trump stated on Monday afternoon that he is likely to speak with China in the next 24 hours. He also warned, “If we cannot reach a deal with China, the definitions will be very large.”

Japanese yen enhances its peers as strong wages for wages and services, fuel databases for a more honest bank in Japan (BOJ). The data showed that the real wages in Japan increased for the second month in a row in December, while the growth of nominal wages reached its highest level in nearly three decades.

Japanese Finance Minister Katsonobo Kato told Parliament on Thursday that the contraction had not yet ended. Kato also referred to the continuous inflationary conditions with the continued high prices.

FX analysts in Société Générale noticed that the Japanese yen outperforms performance, while JGB’s revenues have increased for 10 years to nearly 1.30 %, which is the highest level since April 2011. However, with the average BOJ policy average around 1.00 % over the next two years the two years of the next two years expects , The bullish trend of both JPY and JGB returns remains limited.