AUD/JPY breaks above 90.00 as BOJ favors continuation of easy policy

The AUD/JPY pair has surpassed the psychological resistance of 90.00 in the Asian session. The expression of the continuation of easy monetary policy by the Bank of Japan (BOJ) through the summary of opinions of the previous week’s meeting has trimmed the appeal for the Japanese yen. The risk barometer is delivering a breakout of the volatility contraction pattern, which will drive the asset firmly higher.

Contrary to the movement of the AUD/USD pair, which is displaying weakness, the AUD/JPY pair is showing strength. The Australian Dollar has sensed a severe demand due to the scrapping of Covid-19 restrictions in China. The Chinese administration is making solid steps towards the economy reopening and rerouting to the path of progress.

In order to ease supply chain disruptions, the Chinese economy has revoked quarantine rules imposed on inbound travelers to meet the tolerance Covid policy. This has also resulted in an upside revision of the 2023 Gross Domestic Product (GDP) forecast by China’s National Bureau of Statistics (NBS). The agency said that they have revised the country’s estimate of 2023 GDP growth to 8.4% from 8.1% previously.

However, in THE Asian session, Reuters reported that the United States is considering new Covid measures for travelers from China. “The US government may impose new COVID-19 measures on travelers to the United States from China over concerns about the "lack of transparent data" coming from Beijing, U.S. officials said on Tuesday” mentioned the news.

On the Tokyo front, BOJ’s summary of opinions is indicating that policymakers are in favor of the continuation of loose monetary policy. It also conveyed that the Japanese economy is showing signs of wage rises, a positive economic cycle but it is appropriate to maintain an easy policy.