AUD/JPY rises toward 98.50 after announcement of Japan’s new cabinet ministers

• AUD/JPY appreciates as the Japanese Yen struggles following the release of the new cabinet lineup.
• Sanae Takaichi became Japan’s Prime Minister after securing 237 votes in the Lower House, surpassing the required majority.
• The AUD could benefit from optimism surrounding a potential breakthrough in the US-Australia trade agreement.

AUD/JPY recovers its daily losses and continues its winning streak for the third successive session, trading around 98.30 during the European hours on Tuesday. The currency cross gains ground as the Japanese Yen (JPY) remains subdued after Sanae Takaichi became Japan’s Prime Minister. Takaichi got 237 votes in the Lower House, more than what's needed for a simple majority.

Japan’s newly appointed Chief Cabinet Secretary Seiji Kihara announced the new cabinet lineup, naming Satsuki Katayama as Finance Minister and Ryosei Akazawa as Trade and Industry Minister. Minoru Kiuchi was appointed as Economic Revitalization Minister, Kimi Onoda as Economic Security Minister, and Toshimitsu Motegi as Foreign Minister.

The AUD/JPY cross also draws support as the Australian Dollar (AUD) could gain from optimism over a breakthrough in the US-Australia trade agreement. US President Donald Trump and Australian Prime Minister Anthony Albanese signed a USD 8.5 billion critical minerals agreement at the White House on Monday, aimed at securing access to Australia’s abundant rare-earth resources amid China’s tighter export controls.

Both nations pledged to invest at least USD 1 billion each over the next six months in mining and processing projects, while also agreeing to establish a price floor for critical minerals.

Additionally, the AUD may regain its ground against its major peers amid the easing tensions between the United States (US) and China, Australia’s close trading partner. US President Donald Trump said that he expects to reach a “fair deal” with China’s President Xi Jinping during their upcoming meeting in South Korea, signaling a possible easing of trade tensions.