AUD/JPY Surges to Three-Week Highs, Hits 98.75 Zone

Breaking News: AUD/JPY Soars to Three-Week Highs on RBA Decision

• AUD/JPY attracts follow-through buying after RBA announcement
• RBA maintains benchmark interest rates, remains hawkish
• Anticipation of future BoJ rate hike limits JPY losses

The AUD/JPY cross is experiencing a slight uptrend during the Asian trading session, reaching a three-week peak around the 98.75-98.80 range following the Reserve Bank of Australia’s (RBA) policy decision. This surge signals a potential breakout above the 50-day Simple Moving Average (SMA).

RBA Policy Decision

As expected, the RBA has chosen to keep interest rates unchanged for the seventh consecutive meeting, maintaining the Official Cash Rate (OCR) at 4.35% during its September policy gathering. The central bank reiterated its hawkish stance, emphasizing the need for restrictive policies until there is confidence in sustainable inflation movement towards the target range. This decision, coupled with the recent move by the People’s Bank of China to reduce its 14-day repo rate, is boosting the Australian Dollar (AUD) and providing support to the AUD/JPY pairing.

Market Dynamics

The prevailing positive sentiment in global financial markets is weakening the safe-haven Japanese Yen (JPY), further propelling the AUD/JPY pair. However, expectations of a Bank of Japan (BoJ) rate increase by the end of the year, fueled by Japan’s rising core inflation over the past four months, may temper JPY losses. Additionally, ongoing geopolitical uncertainties could limit the gains for the AUD/JPY cross.