AUD/JPY Dips to 97.35, Amid RBA & BoJ Decisions

Key Points

• AUD/JPY trades weaker at 97.35, down by 0.27%.
• RBA to hold rates at 4.35%, with cuts anticipated in June.
• BoJ rate hike expected in April, influenced by Japan’s wage growth.
• Upcoming RBA and BoJ decisions to drive AUD/JPY direction.

In the latest trading session during Asian hours on Friday, the AUD/JPY pair showed a slight downturn. The currency pair traded weaker below the mid-97.00s, marking a current price of 97.35. This represents a daily change, with the pair losing 0.27%. Investors are keenly observing the cross as pivotal central bank decisions loom.

RBA Eyes 4.35% Rate; BoJ May Hike in April

The financial landscape is bracing for critical upcoming events from the Reserve Bank of Australia (RBA) and the Bank of Japan (BoJ). The RBA’s interest rate decision is on the horizon next week, with market consensus leaning towards maintaining the key rate at 4.35% for a third consecutive meeting. The first-rate cuts are priced in for the June meeting despite elevated inflation levels. A hawkish warning from the RBA could exert pressure on the AUD against the JPY.

Conversely, the BoJ is caught in a speculative divide, with markets split between a March or April decision for a potential rate hike. The scales tip slightly favour an April hike, buoyed by Japan witnessing its highest wage increase over three decades among large companies. Despite this, the BoJ’s stance appears to lower expectations of ending negative rates soon. This could serve as a drag on the JPY, potentially benefitting the AUD/JPY cross.

Central Banks’ Moves Set to Steer AUD/JPY

The RBA and BoJ intertwining decisions significantly sway the AUD/JPY trading dynamics. Should the RBA issue a hawkish statement, it may dampen the AUD’s performance against the JPY. Conversely, the BoJ’s reluctance to exit negative rates and a possible rate hike in April might weaken the JPY, providing a tailwind for the AUD/JPY cross.

Investors and traders closely monitor these developments, as they could introduce volatility and new trading opportunities in the AUD/JPY pair. The anticipation of rate decisions injects uncertainty, yet it also opens the door for strategic positioning ahead of official announcements.

As the market navigates through these pivotal moments, the outcome of central bank decisions will undoubtedly play a crucial role in shaping the near-term trajectory of the AUD/JPY trading pair. With the RBA’s decision pending and the BoJ’s rate hike approaching, stakeholders must stay informed, adapt, and adjust strategies accordingly.