Australian Dollar remains stronger against Japanese Yen following Trade Balance data

  • Australian exports rebounded by 3.7% in August, helping the AUD maintain strength despite a narrowed overall Trade Surplus.
  • Japan's third-quarter Tankan manufacturing index rose to 24, missing consensus expectations and weighing on sentiment for the yen.
  • Bank of Japan policy summary hinted at further interest rate hikes following September's rise to a 31-year high.

AUD/JPY halts its seven-day losing streak, trading around 109.80 during Asian hours on Thursday. The currency cross remains stronger as the Australian Dollar (AUD) holds gains following the release of domestic Trade Balance data.

According to the Australian Bureau of Statistics, Australia's Trade Surplus narrowed to A$495 million month-over-month in August, down from a revised A$1,351 million in July. The narrowing came as imports climbed 5.8% MoM, reversing a 2.4% decline in July, while exports rebounded by 3.7% MoM following a 3.6% drop in the prior month.

On the other side of the currency cross, the Bank of Japan’s (BoJ) Q3 Tankan survey showed business sentiment improved slightly but missed market forecasts. Japan’s Large Manufacturing Index rose from 22 to 24, falling short of the expected 25, while the Non-Manufacturing Index eased to 35 against a consensus estimate of 36.

Meanwhile, the BoJ’s Summary of Opinions from its September policy meeting revealed that some members see a need to accelerate rate increases or move policy closer to target soon. Most members favored further hikes following September's rate increase to 1.25%, a 31-year high.

Strategists at Societe Generale point out that the Yen has stood out in G10 FX trading this month, with Kit Juckes noting that "the yen has been the strongest of the G10 currencies this month, and the market's reluctance to be caught out by intervention is clearly having an impact." He links the currency’s outperformance to heightened sensitivity around potential official action in Japan, arguing that expectations of further USD/JPY intervention are discouraging investors from rebuilding short Yen positions and encouraging a more cautious approach to Yen crosses.

Economic Indicator

Trade Balance (MoM)

The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports provide an indication of domestic demand. Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.

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Last release: Thu Oct 01, 2026 01:30

Frequency: Monthly

Actual: 495M

Consensus: -

Previous: 1,923M

Source: Australian Bureau of Statistics

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