The USD/JPY pair continues to trade with a mild positive bias, remaining just below its weekly high. This high was reached the previous day, amidst a positive risk tone in the market. Meanwhile, concerns over potential new tariffs on Japan by former President Donald Trump have led to a weakening of the Japanese Yen (JPY). The market's anticipation of a hawkish stance from the Bank of Japan (BoJ) has kept Japanese Government Bonds (JGBs) elevated near a multi-year peak, limiting further losses for the JPY.
In the broader economic landscape, signs of a cooling labor market and easing inflation are providing the Federal Reserve with ample room to cut interest rates. These factors, coupled with concerns about a tariff-driven economic slowdown in the United States, suggest that the Fed could reduce rates multiple times this year.
Amidst these financial dynamics, the Australian Dollar (AUD/USD) has climbed higher for the third consecutive day, showcasing resilience in the face of global economic uncertainties. Furthermore, gold prices surged to over a two-week high during the Asian trading session on Thursday, reflecting investors’ gravitation towards safe-haven assets amidst ongoing economic concerns.
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