Australian Dollar Extends Strength Against Japanese Yen Following Trade Data

Last Updated on 01/10/2026

• Australian exports rebounded 3.7% in August, supporting the Australian Dollar despite a narrower overall trade surplus.
• Japan’s Q3 Tankan manufacturing index climbed to 24 but fell short of market expectations, putting pressure on the Yen.
• The Bank of Japan’s policy summary pointed to the possibility of further rate hikes after its September increase lifted rates to a 31-year high.

AUD/JPY snapped a seven-session losing streak, trading near 109.80 during Thursday’s Asian session. The cross maintained its upward momentum as the Australian Dollar (AUD) benefited from the latest domestic Trade Balance figures.

Data from the Australian Bureau of Statistics showed that Australia’s trade surplus narrowed to A$495 million in August from a revised A$1.351 billion in July. The decline reflected a 5.8% month-on-month increase in imports, reversing the 2.4% contraction recorded in July. Meanwhile, exports recovered 3.7% MoM after falling 3.6% in the previous month.

On the Japanese side, the Bank of Japan’s (BoJ) Q3 Tankan survey indicated a modest improvement in business sentiment, although the figures came in below market expectations. The Large Manufacturing Index increased from 22 to 24, missing the forecast of 25, while the Non-Manufacturing Index slipped to 35 versus the consensus estimate of 36.

The BoJ’s Summary of Opinions from its September policy meeting also showed that some policymakers believe interest-rate increases may need to be accelerated or that policy should move closer to its target in the near term. Most policymakers supported additional rate hikes after the September increase to 1.25%, the highest level in 31 years.

Societe Generale strategists noted that the Japanese Yen has been the standout performer among G10 currencies this month. Kit Juckes said the Yen’s strength reflects the market’s reluctance to risk being caught off guard by potential Japanese intervention. According to the strategist, heightened expectations of further USD/JPY intervention are discouraging investors from rebuilding short-Yen positions, while also prompting greater caution across Yen-related currency pairs.