AUD/JPY trades firmly around 94.00, US-China trade talks remain key

• AUD/JPY clings to gains near 94.00, while investors await trade discussions between the US and China.
• Market experts believe that the RBA will cut interest rates again in the July policy meeting.
• An upward revision in Japan’s Q1 GDP data has supported the Japanese yen.

The AUD/JPY pair holds onto a two-day strong upside move around 94.00 at the start of the week. The cross exhibits strength ahead of the trade negotiations between delegates from the United States (US) and China in London later in the day.

Investors will pay close attention to the US-China trade talks as they will influence the next move in the Australian Dollar (AUD), given Australia’s strong reliance on its exports to Beijing.

“I am pleased to announce that Secretary of the Treasury Bessent, Secretary of Commerce Lutnick, and United States Trade Representative, Ambassador Greer, will be meeting in London on Monday, June 9, 2025, with Representatives of China, with reference to the Trade Deal. The meeting should go very well,” US President Donald Trump wrote in a post on Truth.Social over the weekend.

Last week, US President Trump expressed confidence that trade discussions with China would go well after a phone call with Chinese leader XI Jinping.

On the data front, upbeat China Trade Balance data for May, which was released earlier in the day, also supported the Australian Dollar. China's Trade Balance (CNY) came in at CNY743.56 billion in May, higher than the previous surplus of CNY689.99 billion.

On the domestic front, the Australian economic calendar has little to offer this week. Therefore, the major trigger will be global announcements and market expectations for the Reserve Bank of Australia’s (RBA) monetary policy outlook. EQ Economics managing director Warren Hogan has stated that the RBA should reduce its Official Cash Rate (OCR) by 35 basis points (bps) to 3.5% in its next monetary policy meeting, which is in July.

Meanwhile, the Japanese Yen (JPY) trades higher against its major peers at the start of the week. The Asian currency gains after revised Q1 Gross Domestic Product (GDP) data showed that the economy remained flat. Preliminary Q1 GDP data showed that the economy declined steadily by 0.2%.