The AUD/JPY pair experienced a recovery, reaching approximately 89.40 during the early European trading session on Tuesday, reflecting a 1.06% increase. This upward movement coincides with the People’s Bank of China (PBoC) pledging financial support to sovereign wealth funds to stabilize markets impacted by US tariffs.
Improved global risk appetite and China’s stimulus initiatives are providing support to the Australian Dollar (AUD). Market participants are anticipating a speech from Bank of Japan (BoJ) Governor Kazuo Ueda on Wednesday for further market direction. The PBoC has indicated its commitment to providing funding assistance to Central Huijin Investment Ltd. through a re-lending program to ensure capital market stability.
These stimulus measures from China, a significant trading partner of Australia, may bolster the AUD. However, ongoing trade uncertainties could strengthen demand for safe-haven currencies like the Japanese Yen (JPY), potentially creating resistance for the AUD/JPY pair. Japanese Prime Minister Shigeru Ishiba has stated Japan’s continued efforts to negotiate lower tariffs on Japanese goods with the United States, while acknowledging the gradual nature of progress.
