AUDJPY continues to rise on hawkish market sentiment over the RBA’s interest rate trajectory.
On Tuesday, the AUDJPY pair edged higher around 98.50 during European trading hours, marking the sixth consecutive session of upward movement. The Australian Dollar (AUD) gains ground versus the Japanese Yen (JPY) as market sentiment shifts toward the anticipation of a sturdy Australian economy, bolstered by low unemployment and strong corporate balance sheets. Westpac expects the Reserve Bank of Australia (RBA) to retain its current monetary policy. posture throughout 2024 and take a less stringent approach in 2025.
The Australian dollar is under pressure after the S&P/ASX 200 broke its winning streak on Tuesday.
However, the Australian Dollar (AUD) was under pressure from a weaker Australian money market. The S&P/ASX 200 index’s winning streak came to an end as mining and energy companies fell on lower commodity prices, potentially limiting the AUDJPY cross’s rise.
The Reserve Bank of Australia (RBA) has issued the minutes of its February monetary policy meeting. During the meeting, the RBA Board discussed the potential of hiking interest rates by 25 basis points (bps) or keeping them unchanged.
Although recent statistics gave the board with improved confidence that inflation will return to target within a reasonable timeframe, there was acknowledgement that it would “take some time” for the board to be adequately sure about inflation. As a result, the board decided it was reasonable not to rule out another rate hike, signaling a cautious stance to future monetary policy decisions.
Atsushi Mimura, a Japanese official, discussed interacting with other countries over foreign exchange intervention.
On Japan’s side, Japanese Finance Ministry official Atsushi Mimura stated. That the government is in talks with other countries for FX intervention.” He noted that when action is required. The government can sell assets such as savings and foreign bonds to replenish FX reserves.
Furthermore, Finance Minister Shunichi Suzuki expressed. Concern about the detrimental consequences of a weaker yen. In an earlier interview, Suzuki stated, “The Bank of Japan (BoJ) has power over monetary policy. “However, interest rates will eventually rise.” Market players will likely focus on Japan’s Trade Balance data. Including import and Export data for January are due to be revealed on Wednesday.
