AUD/JPY moved up towards 95.00 as the Australian Dollar gained on rising Copper futures, which reached a record high above $5.20 per pound. US President Donald Trump’s plans to impose tariffs on Copper imports within weeks contributed to this advance.
Despite the gains, the AUD fell against other currencies following a CPI report indicating a year-over-year rise of 2.4% in February, which was slightly below expectations. The Japanese Yen weakened as the market anticipated the impact of US tariffs on key Japanese exports.
Bank Of Japan’s Stance On Interest Rates
Bank of Japan Governor Kazuo Ueda noted that the central bank would raise interest rates if economic conditions remain favourable, citing unexpected economic growth stimulating consumer spending.
Copper’s surge past $5.20 per pound has lent strength to the Australian Dollar, pushing AUD/JPY towards the 95.00 mark. The US administration’s incoming tariffs on Copper imports are playing their part, adding another layer to the currency’s movement. However, despite that support, inflation data has weighed on the Aussie against other currencies, with February’s annualised Consumer Price Index rising 2.4%—a touch lower than predicted.
This cooling inflation print suggests the Reserve Bank might not be in a hurry to adjust rates. Expectations had leaned toward firmer price pressures, but with the figures coming in softer, it leaves room for policymakers to hold back. Meanwhile, the Japanese Yen has lost ground with traders pricing in potential ripples from the impending US trade measures.
Market Sentiment And Future Outlook
Ueda’s comments suggest an openness to tightening policy if the economic backdrop continues to hold up. He pointed to stronger-than-expected growth bolstering consumption, which could give policymakers a reason to shift. However, markets remain wary, gauging just how resilient Japan’s recovery truly is.
Derivative traders should consider how these factors align. Australia’s currency has support from strong commodity prices, but mixed domestic data tempers confidence. Meanwhile, Japan’s central bank may adjust its stance, yet external risks muddle the picture. Each of these dynamics could affect price action in the coming weeks.
