ASX rebounds; Trump’s trade deal with Japan

Hello and welcome to the On the Money podcast. It's Wednesday, the 23rd of July. I'm Stephanie Yousaf, filling in for Ricardo Goncalves. The ASX 200 has closed up 0.69% today, led by the mining and financial sectors. I'll have more on that and Trump's new trade deal with Japan.

Stephanie Yousaf

A little later with Robert Talevsky. But first, the Australian Federal Police and Australian Banking Association have joined forces to issue a warning to Australians to stop renting out their bank accounts to criminals. They say many people are knowingly or unknowingly becoming money mules for criminals who use their bank accounts to move money into a personal account in order to make the funds appear legitimate. I spoke with Australian Banking Association CEO Anna Bligh.

Anna Bligh

Unfortunately, we see criminal gangs who are setting out to scam Australians. They need a bank account for the money to go into, so they offer to rent or buy an account sometimes for as little as $200 or $500.

Anna Bligh

The money they scam out of your account goes into that mule account and then very quickly leaves the country, often through something like a crypto platform. The money is impossible for banks or police to get back. So mule accounts are a critical part of the scam ecosystem.

Anna Bligh

If somebody is offering to buy or rent your account, just say no. Don't let a criminal cash in on your bank account. The Australian Banking Association, along with the Australian Federal Police, are committed to ensuring that these mule accounts are shut down wherever we can find them.

Anna Bligh

And that these accounts are reported to the police. This activity is illegal. Many people don't realise that they're participating in criminal activity, and it's time that they understood better to stay away from anybody who offers to buy or rent your account.

Anna Bligh

In the last year, Australian banks have shut down 13,000 accounts which were being rented or sold for criminal purposes. The year before that it was 9000 accounts, and we believe the increase is as much about the increased.

Anna Bligh

Capacity of banks to detect this kind of activity as it is about growth in this kind of activity. So 13,000 Australians renting or selling their accounts to criminals so that other Australians can be scammed is far too many. If you're renting or selling your bank account, then you need to know that banks have increasingly sophisticated technology to identify unusual activity that would identify that your account is being used in this way.

Anna Bligh

Last year Australian banks shut down 13,000 accounts that were being used by criminals to scam money out of other Australians. We will continue to see banks investing in new technology that will make it.

Anna Bligh

Even easier for them to discover these mule accounts. When they do discover them, they shut them down. They also make sure that every other bank knows about these accounts so that they can also stop money going to them, and they report it to the police.

Anna Bligh

If you rent or sell your bank account to somebody else, you are at serious risk of criminal prosecution. It is illegal to rent or sell your bank account. All too often people think that this is harmless. It is not. People often think renting their bank account is a harmless activity, but in fact what they're doing is leaving criminals an opportunity to scam someone in their family, someone that they care about.

Anna Bligh

We need to keep all Australians safe from scammers, and so other Australians need to do the right thing. Do not rent, do not sell your own bank account. All you are doing is giving scammers and criminals a chance to rip off Australians. Unfortunately, we sometimes see people who have been coerced into renting or selling their account, or they've been tricked into doing it. If you are approached.

Anna Bligh

By somebody wanting to buy or sell your account or you feel that you have been tricked or coerced into doing this, you should talk to your bank immediately. They can take action to protect the account and to protect you from criminal prosecution. So don't be silent if you feel that you've been approached inappropriately, if you think you've been tricked or coerced into it, go and talk to your bank as quickly as you can.

Stephanie Yousaf

That was Anna Bligh from the Australian Banking Association. To the markets, and Australian and Japanese shares have closed in positive territory following Donald Trump's announcement of a trade deal with Japan. It will see Japan hit with a 15% tariff on Japanese exports into the US rather than the 25% rate Trump had threatened earlier this month, and also sees a pledge of $550 billion in investment in American industry.

Stephanie Yousaf

For more, I spoke with founding manager of Activum Group, Robert Talevsky.

Robert Talevsky

The ASX was up 0.6% today. Sector performance has been mixed. The big miners, education services, and the energy sectors led the gains. Consumer non-cyclicals and tech sectors were in the red. Overnight in the US, the S&P 500 set a fresh record.

Robert Talevsky

Investors rotated into more defensive sectors as tech stocks lost momentum. Nvidia and Meta fell ahead of earnings from Tesla and Alphabet Google, which are due on Wednesday.

Stephanie Yousaf

Donald Trump has announced a trade deal with Japan, which has been welcomed by the markets, but the US dollar seems a bit shaky against the yen. The greenback has been one of the biggest losers since Trump announced his tariffs back in April. Why is that? And can we expect that to continue as more trade deals are announced?

Robert Talevsky

Trump announced a US-Japan trade deal. Japan to invest essentially over $500 billion into the US. The deal includes a 15% reciprocal tariff. The Japanese market opened 1.8% higher on that news. Car makers Mazda and Toyota were up more than 10%.

Robert Talevsky

The US lost ground against the Japanese yen after that trade deal was announced. So the US remains on shaky ground against the yen. Trade tensions have triggered a sell America shift. Investors have been moving into safe-haven currencies like the yen.

Robert Talevsky

Also, Japan's signalling rate hikes narrow the interest rate differential gap between the US. That has had an impact, and more trade deals and tariffs could put pressure on the US dollar. But strong US data and Fed policy may support that particular currency going

Stephanie Yousaf

forward. What company news is catching your attention today?

Robert Talevsky

The CommBank reversed early losses to finish up. This follows its biggest drop since early May. CBA has been down 10% off its peak. Rio Tinto, BHP and Fortescue were boosted by China's supply-side reforms for the steel industry and plans for a massive dam project in Tibet.

Stephanie Yousaf

And finally, where are the opportunities for investors?

Robert Talevsky

Global and Aussie small caps offer strong upside as rotation broadens. Credit markets are more attractive than bonds, high yields and better value. Fiscal stimulus and AI adoption to drive earnings growth going forward. Active investment manages to capture innovation, infrastructure and emerging markets value, and volatility might be seen as a buying opportunity in the future.

Stephanie Yousaf

That was Robert Talevsky from Activum Group.

Ricardo Goncalves

This SBS on the Money podcast is provided for informational purposes only. The content on this podcast should not be understood as constituting advice or a recommendation. It is not personal advice and does not consider your personal circumstances or objectives. You should contact a licenced professional before making any financial decision.

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