Forex
Home›Forex›Major Pairs›Australian dollar strengthens versus Japanese yen afte…
Australian dollar strengthens versus Japanese yen after hotter CPI
Australia’s CPI rose 3.5% year over year in July, beating the 3.2% forecast and supporting AUD/JPY around 114.20.
FXStreet reports that AUD/JPY extended gains for a second consecutive day, trading near 114.20 during Asian hours on Wednesday.
The move followed Australia’s Consumer Price Index data, which showed inflation climbing 3.5% year over year in July, up from 3.8% in June and ahead of the 3.2% forecast. Australia’s monthly CPI also rose 1.0% in July, versus a 0.8% estimate, while the Trimmed Mean CPI increased 0.5% month over month and 3.6% year over year.
FXStreet adds that the cross has remained supported as the Japanese yen faces pressure from Japan’s expansionary fiscal policy, high national debt, and a wide interest-rate differential versus other major economies. At the same time, potential yen losses may be capped by growing expectations that the Bank of Japan will tighten further, with markets pricing in a rate hike next month.
The report also points to fresh Japan data, where a key service-sector inflation gauge rose 3.6% year over year in July, reinforcing the case for tighter policy. Strategists at Scotiabank said investors are increasingly focused on the Bank of Japan’s tone and guidance beyond the September 18 decision rather than the meeting outcome alone.