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Japanese Yen Unchanged Despite Initial Trade Accord with U.S.; AUD Falls

Investing.com - The Japanese yen stayed largely unchanged against the U.S. dollar on Tuesday in Asia despite news that Japan and the U.S. had reached an initial trade accord over tariffs.

It is unclear whether the U.S. will maintain tariffs on Japanese auto imports as part of the agreement.

The yen was little impacted by the news, as the USD/JPY pair was unchanged at 108.10 by 11:10 PM ET (03:10 GMT).

The AUD/USD pair lost 0.3% to 0.6842.

Minutes of the Reserve Bank of Australia’s Sept 3 meeting showed the central bank would consider more rate cuts in order to support growth and also to reach its 2-3% inflation target.

"Members would assess developments in both the international and domestic economies, including labor market conditions, and would ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time," the minutes showed, adding that the RBA expects the low-interest rate environment to be maintained for an extended period of time.

Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies was little changed at 98.160. Traders now await the U.S. Federal Reserve's two-day policy meeting later this week. The central bank is expected to lower rates by a quarter of a percentage point to support economic growth.

"Markets are pricing in two additional rate cuts by next year but the Fed is unlikely to make such a forecast, so we could see further gain in the dollar," said Yukio Ishizuki, senior strategist at Daiwa Securities.

Traders are also awaiting more news on the Sino-U.S. trade front. Tensions between the two sides eased somewhat following reports that they could reach an interim pact, although U.S. President Donald Trump said he preferred a comprehensive trade deal with China.

China’s Commerce Ministry said today that Vice Finance Minister Liao Min will lead a delegation to visit the U.S. later this week for more trade discussions.

The USD/CNY pair gained 0.2% to 7.0794.

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