Forex
Home›Forex›Major Pairs›Aussie dollar slides versus yen as rate-hike odds fade
Aussie dollar slides versus yen as rate-hike odds fade
AUD/JPY was last around 113.65, down 0.65% on the week, after Australia’s June CPI came in softer than forecast.
The Australian dollar weakened against the Japanese yen, with the AUD/JPY cross falling to around 113.65 in early European trading on Thursday, FXStreet said. The pair was also down 0.65% on the week as markets scaled back expectations that the Reserve Bank of Australia will raise rates soon.
FXStreet linked the move to fresh Australian inflation data showing headline CPI eased to 3.8% year over year in June from 4.0% in May, below the 4.0% expected by markets. According to the piece, pricing for an August RBA rate hike dropped from nearly 21% to about 3% to 4% after the CPI release.
Traders are now focused on upcoming central bank catalysts in Japan, with the Bank of Japan expected to keep its interest rate steady at 1.0% at its July policy meeting on Friday. FXStreet noted that attention will also turn to Japan’s Tokyo CPI report and the BoJ’s quarterly outlook and Governor Kazuo Ueda’s press conference for signals on how soon it could lift still-low borrowing costs.
Analysts polled by Reuters, as cited by FXStreet, expect the BoJ to raise rates to 1.25% by end-December and possibly as early as October. FXStreet added that strategists said the softer-than-expected Australian inflation should ease immediate policy concerns for the RBA, citing a decline in both headline and core measures.