• AUD/JPY pares its daily losses after Australia's April Trade Balance shifted to a 1,791M surplus from a prior deficit.
• The JPY gains ground as traders price in a potential Bank of Japan interest-rate hike later this month.
• Japan’s Finance Minister Katayama emphasized that persistent energy market volatility requires Japan to remain prepared for "appropriate action."

AUD/JPY pares its daily losses, remaining in the negative territory and trading around 114.10 during the Asian hours on Thursday. The receives minor support as the Australian Dollar (AUD) gains following the release of Australia’s Trade Balance data.

The Australian Bureau of Statistics (ABS) reported on Thursday that the Trade Balance shifted to a surplus of 1,791M month-over-month (MoM) in April, following a deficit of 1,024M in the previous reading (revised from $1,841M). The market consensus was for a surplus of 1,800M. Australia's Exports rose by 7.2% MoM in April from a fall of 2.5% seen in March (revised from -2.7%). Meanwhile, Imports increased by 0.8% MoM, compared to a previous rise of 12.2% (revised from 14.1%).

Meanwhile, the Japanese Yen (JPY) gains ground as traders continue to price in another interest-rate hike from the Bank of Japan (BoJ) later this month as policymakers grapple with rising costs and a stubbornly weak Yen, both of which have been aggravated by ongoing tensions in the Middle East.

BoJ Governor Kazuo Ueda adopted a hawkish stance during a speech in Tokyo on Wednesday. He emphasized that the central bank must carefully weigh the balance of a rate hike if inflationary pressures begin to pose a greater threat than risks to overall economic growth.

Meanwhile, Tokyo remains highly vigilant regarding currency volatility. Finance Minister Satsuki Katayama declined on Tuesday to comment on specific market movements or recent intervention data, but she warned that persistent instability in energy markets requires Japan to remain prepared for "appropriate action." Framing potential interventions as comprehensive economic management rather than a simple defense of the exchange rate, Katayama noted that Tokyo is actively monitoring the markets in close coordination with the United States.