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AUD/JPY pauses gains near 111.30 amid safe-haven demand

AUD/JPY traded around 111.30 after China’s June trade balance beat expectations in USD terms but eased versus the prior month, while traders weighed additional RBA tightening risk.

Reported · Written up by our desk · Major Pairs

FXStreet reports that AUD/JPY stopped its three-day advance and was trading around 111.30 during Friday’s Asian session. The currency cross fell as the Australian dollar weakened, driven by a rise in global safe-haven demand.

The move comes as escalating tensions in the Strait of Hormuz have shaken market stability, adding skepticism about whether the shipping route will reopen soon. At the same time, China’s latest trade figures pointed to a mixed economic picture for Australia because of the two countries’ close trade links.

China’s June Trade Balance came in at $112.5 billion in US dollar terms, above the $107.0 billion expectation, but below the prior reading of $125.62 billion. In yuan terms, the trade surplus widened to 767 billion, beating estimates of 740 billion but falling short of 859.05 billion, while exports grew 23.9% year over year and imports rose 27.5%.

Rabobank’s FX strategists said there remains risk of one more Reserve Bank of Australia rate hike this year in November, and they expect the August 11 policy meeting to clarify rate hike odds. Rabobank kept a modest 12-month upside bias for the Australian dollar, while FXStreet also cited ING’s view that weakness across Asian currencies may have helped trigger US USD/JPY intervention, with officials potentially acting again if conditions warrant.

Latest closeUSD/JPY 158.52 ▲0.6%

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