AUD/JPY approaches 84.00 post-RBA decision

AUD/JPY holds onto the initial gains on Tuesday in the early European trading hours. The pair touched the intraday high in the vicinity of 84.0 and manages to preserve the upside momentum following the Reserve Bank of Australia (RBA) interest rate decision.

At the time of writing, AUD/JPY is trading at 83.79, up 0.30% for the day.

The Reserve Bank of Australia (RBA) kept its official cash rate (OCR)unchanged at a record low of 0.10% in its July monetary policy meeting.
 
The market already discounted the RBA's decision and expected nothing new will be offered in the meeting. The only key takeaway is that the RBA is planning another round of bond purchases beyond the completion date in September.

In addition to that, the ongoing tensions between China and Australia came up with another blowout after Beijing accused its counterpart of COVID-19 vaccine sabotage in Asia-pacific keeps pressure on the aussie.

On the economic side, the Australian AiG Construction PMI dropped to 55.5 in June from 58.3 in the previous month. The Retails Sales rose 0.4% in June compared to 1.1% growth in the prior month.  

On the other hand, the yen gained on its safe-haven appeal amid rising coronavirus infection globally due to the Delta variant and threatening the pace of economic recovery. 

In the latest development, the Japanese government is set to extend its quasi-state of emergence in Tokyo during the Summer Olympics. A slower vaccination rollout program and lockdown restriction kept the currency gains limited

The sentiment further soured following the downbeat economic data. Household Spending in Japan jumped 11.6% in May, though the pace of growth slowed from the previous month from a 13% gain. 

As for now, the market dynamics continue to influence the pair’s performance for the time being.

AUD/JPY additional levels