AUD/JPY correction meeting supply on continued trade war risk
- Safe haven bid in the yen to keep the pair under pressure.
- Commodity currencies weighed by ongoing trade risk concerns.
AUD/JPY partially corrected losses last week as trade tensions eased. The trigger was news that US President Trump predicted he would speak with Chinese President Xi Jinping very soon which helped to support commodity markets after a torrid time.
"The ANZ China Commodity Index eked out a gain on Friday to close out the week up 2.1%. This performance was supported by a strong gain in agriculture, with hog prices up 7% over the course of the week. Energy and bulk commodity markets struggled to gain traction, down 0.8% and 1.7%, while industrial metals were only marginally higher. Amid the volatility, the precious metals sector shone. Gold prices were up sharply, while silver was also strong,"
analysts at ANZ Bank explained.
However, trade headlines continue to pressure from one day to the next. In today's open, Trump has been crossing the wires and said he is not ready for a trade deal with China.
Key comments from Trump:
Trade deal with china harder if there's violence in HK.
Money is pouring into the US, Fed is not helping.
He does not expect a recession, says tax cuts gave consumers money to spend.
US pres Trump: I’m not ready yet to make a deal with China.
We are ‘open not to doing business’ with Huawei.
Huawei is a national security threat.
The focus this week will also include central banks, with the Jackson Hole as well as the minutes from the last Federal Reserve meeting. As for the Reserve Bank of Australia, with a few recession warnings now being triggered across the globe, markets are expecting lower rates which should keep the Aussie under pressure while the Yen picks up a safe haven bid.