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According to Israels Channel 12: Security agencies are preparing for a possible decision by Trump to take military action against Iran in the coming days.According to Israels Channel 12: Israel is closely monitoring the draft agreement between the United States and Iran, fearing that Tehran may receive sanctions relief without resolving the nuclear issue.According to Israels Channel 12: The Israeli military has declared a state of high alert in order to prevent a possible escalation of tensions with Iran.May 23 - Reuters, citing an internal document, reported that 27 countries have activated their domestic crisis response mechanisms to apply for World Bank funding to address the global economic impact of the conflict in Iran. The World Bank document did not list specific countries or the total amount of funding potentially requested, but officials in Kenya and Iraq confirmed they are seeking rapid financial support from the World Bank to address the effects of the conflict, such as soaring fuel prices and a sharp drop in oil revenues.On May 23, it was reported that India, the worlds third-largest consumer of liquefied petroleum gas (LPG), is currently facing an LPG supply gap of approximately 400,000 barrels per day (compared to pre-war levels), with domestic production unable to compensate for the decline in imports caused by the war with Iran. Data from energy data analytics firm Kpler shows that Indias LPG imports in April were 377,620 barrels per day, less than half of the 851,870 barrels per day imported in February. In April, Indias domestic production increased to 530,000 barrels per day, an increase of approximately 75,000 barrels per day from the previous month. Sumit Ritolia, chief refining and supply analyst at Kpler, stated that the situation is more serious because Indias domestic LPG production is nearing full capacity, meaning that the supply gap could persist as long as imports do not fully recover. A black market seller stated, "Due to soaring costs, we noticed a slight slowdown in customer demand in April. But people have no choice, as switching to other fuels is not easy."

AUD/JPY remains around 95.00, and a greater policy difference between the RBA and BOJ is likely

Alina Haynes

Sep 02, 2022 14:46

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The Australian Dollar/Japanese Yen exchange rate has been volatile during the Tokyo trading session, moving in a slightly wider range of 94.77-95.20. In the meantime, investors have been watching the asset's price closely ahead of next week's monetary policy decision by the Reserve Bank of Australia (RBA). The cross has shown a sideways auction over the previous two trading sessions despite the issuance of a dismal Caixin Manufacturing PMI.

 

Following a downward revision, economic indicators now stand at 49.5, which is lower than both the prior report of 50.4 and the consensus expectation of 50.2. Fears of a recession have been exacerbated by the Chinese government's lockdown restrictions in the face of a rebound in Covid-19 cases.

 

As China's largest trading partner, Australia could feel the effects of China's weak economic performance if the latter continues to struggle.

 

Policy divergence between the Reserve Bank of Australia and the Bank of Japan could widen after next week's RBA interest rate announcement (BOJ). RBA Governor Philip Lowe is expected to announce a fourth consecutive 50 basis point rate hike in light of mounting inflationary pressures in the Australian economy (bps). To account for this possibility, the OCR will go up to 2.35 percent.

 

In the meantime, the weak yen is causing rising import prices in Japan. The private sector faces headwinds from expensive inputs, which significantly impact margins. Positive Retail Trade figures this week did not help the Japanese yen. Compared to the predicted 1.9% and the prior announcement of 1.5%, annual retail sales jumped dramatically to 2.4%.

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