AUD/JPY soars to near 92.40 as Australian Inflation accelerates to 7.8%
|- AUD/JPY climbs to near 92.40 amid a sharp increase in Australian inflation.
- Annual Australian inflation has jumped to 7.8%, while quarterly inflation has climbed to 1.9%.
- Rising interest rates by the RBA have significantly contracted the scale of economic activities.
The AUD/JPY pair has jumped to near 92.40 as the Australian Bureau of Statistics has reported a higher-than-anticipated Consumer Price Index (CPI) report for the fourth quarter of CY2022. The annual CPI has jumped to 7.8% from the expectations of 7.5% and the prior release of 7.3%. On a quarterly basis, the inflation rate has climbed to 1.9% vs. the consensus of 1.6% and the former release of 1.8%.
A higher-than-expected inflation rate will compel the Reserve Bank of Australia (RBA) to hike interest rates further in its February monetary policy meeting. The Australian Financial Review’s survey of 34 economists put the first post-pandemic-era rate cut in play by March 2024. But before that, it expects RBA Governor Philip Lowe to continue hiking interest rates further to 3.60%. The RBA is expected to hike its Official Cash Rate (OCR) by 25 basis points (bps) in February and June.
Meanwhile, economic activities in the Australian region have constantly been contracting for the past seven months due to restrictive monetary policy. According to the preliminary S&P PMI (Jan), Australian Manufacturing PMI has trimmed consecutively for the seven-month to 49.8 while the street was expecting an expansion to 50.3. Also, the Services PMI has dropped vigorously to 48.3 from the consensus of 49.7, released on Tuesday.
On the Tokyo front, the Japanese Yen bulls continuously face pressure from the market participants after Bank of Japan (BoJ) Governor Haruhiko Kuroda kept a dovish stance on interest rates and Kuroda kept a dovish stance on interest rates and also kept the range of Japanese Government Bonds (JGBs) unchanged. This week, the release of The Tokyo inflation data will be of utmost importance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.