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AUD/JPY slides to early-April lows after US-Japan intervention
The AUD/JPY cross fell to around 110.00, after Japan conducted a rare bilateral intervention with the US to stem yen weakness and the BoJ signaled it is ready to keep lifting borrowing costs.
The Australian dollar versus the Japanese yen is extending losses, with AUD/JPY dropping for a fifth straight day and slipping to its lowest level since early April during the Asian session.
FXStreet reports the cross trades near the 110.00 area, down more than 0.5% on the day, after Japan’s Finance Minister Satsuki Katayama confirmed that Japanese authorities conducted a rare bilateral foreign exchange intervention with the United States on Friday. US Treasury Secretary Scott Bessent also said Washington would not hesitate to join further coordinated action if moves in the yen remain disorderly.
The intervention appears to have triggered follow through yen short covering, while the Bank of Japan maintained a hawkish bias at its end of July meeting. The BoJ showed readiness to keep pushing up borrowing costs, which underpinned the yen, even as the AUD struggled to attract buyers amid lower expectations for an immediate Reserve Bank of Australia rate hike.
On the data and policy side, FXStreet points to weaker momentum for the Aussie, citing disappointing China manufacturing PMI that kept AUD bulls cautious. It also notes that Deutsche Bank strategists said tempered inflation expectations have reduced pressure for more RBA tightening after rates were raised three times earlier in the year, with annual core inflation edging from 3.5% to 3.6%, below the 3.7% consensus.