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AUD/JPY rises 0.7% as yen weakens ahead of RBA decision
The Japanese yen sold off after Japan’s current account unexpectedly swung to a ¥92.3 billion deficit in June, helping lift AUD/JPY to about 112.25.
AUD/JPY rose 0.7% on Monday and was trading around 112.25, supported by broad weakness in the Japanese yen.
The yen faces renewed selling pressure after Japan’s current account unexpectedly shifted to a ¥92.3 billion deficit in June, versus expectations for a ¥1.5 trillion surplus. Japan’s Ministry of Finance attributed the deterioration partly to higher oil prices and dividend payments to foreign investors, while concerns about long term debt sustainability remain after Japan’s public debt rose above 200% of GDP.
On the central bank front, the Bank of Japan maintains a tightening bias, with its July Summary of Opinions indicating most officials back further policy normalization, though Japanese rates are still relatively low versus other major economies.
Attention then turns to Tuesday’s Reserve Bank of Australia decision, where the benchmark rate is widely expected to stay at 4.35% after three hikes earlier this year. Traders will look to the RBA policy statement, updated forecasts, and Governor Michele Bullock’s comments for clues on the odds of additional tightening.