ECB Chief Economist Philip Lane stated US tariffs may slow Eurozone growth but are unlikely to cause a recession, as the region has diverse trading partners. The ECB’s June meeting will provide updated economic projections, likely reflecting weaker growth and inflation due to tariffs, with current 2025 growth forecasts at 0.9% (ECB) and 0.8% (IMF). Despite debates among ECB members on pausing or continuing rate cuts, President Lagarde has emphasized a data-dependent approach, with more clarity expected from the June meeting as tariff impacts become clearer. Meanwhile, China aims to strengthen EU ties at a July summit.

The Trump administration’s softened stance on China has shifted focus to US-Japan trade talks, with Japan aiming to secure tariff concessions, particularly on rice imports, at the June G7 summit, while resisting US efforts to align against China due to vital trade ties. Goldman Sachs has been out calling for a USDJPY drop to 135 within 12 months, citing an overvalued dollar. A Bloomberg survey indicates no policy change at the BOJ’s April 30-May 1 meeting, with expectations for a rate hike by September falling to 45% and a terminal rate of 1%. The BOJ is expected to lower its 2025 growth forecast to 0.6%, per the IMF, but maintain gradual rate hikes, as a stronger yen offsets tariff impacts by reducing import costs and supporting consumption, according to Itochu Research Institute’s Chief Economist.

The Australian Dollar is showing signs of bottoming out, supported by a shift away from USD assets and China’s 600 billion yuan liquidity injection to counter US tariffs, with potential tariff relief on US imports further boosting sentiment. The Trump administration’s softened stance on China suggests the worst of the trade war’s impact may be over, benefiting antipodean currencies. Despite US tariffs posing indirect risks to Australia via trading partners like China and Japan, many analysts are projecting growth, with RBA rate cuts expected in May to mitigate slowdowns. Australia’s Labor party is planning a critical mineral reserve if re-elected, aiming to leverage the country’s position as the fourth-largest rare earths producer.