- AUD/JPY struggled after the RBA decided to keep the policy rate unchanged at 4.35% on Tuesday.
- Analysts from Commonwealth Bank and Westpac forecast that the RBA's interest rate could have reached its peak at 4.35% in November 2023.
- The safe-haven JPY faced challenges due to the prevalent risk appetite.
AUD/JPY trades around 102.20 during the Asian trading hours on Tuesday. The Australian Dollar (AUD) faced a challenge after the Reserve Bank of Australia's decision to keep interest rates steady at 4.35%, as anticipated during Tuesday's meeting. This decision is likely influenced by the recent Australian inflation data surpassing expectations last week.
Australia experienced a decline in inflation during the first quarter, marking the fifth consecutive quarter of deceleration, despite surpassing initial forecasts. Furthermore, the country's monthly CPI indicator surged in March, contrary to market expectations of stagnation.
Analysts at Commonwealth Bank and Westpac predict that the RBA's interest rate might have peaked at 4.35% in November 2023, before gradually declining to 3.10% by December 2025.
Meanwhile, the risk-on sentiment persists, exerting pressure on safe-haven currencies such as the Japanese Yen (JPY). Masato Kanda, Japan's top currency diplomat, hinted at possible measures to address excessive market fluctuations earlier on Tuesday.
Last week, the Japanese Yen (JPY) saw appreciation amidst speculation of government intervention by Japanese authorities. Reuters reported data from the Bank of Japan (BoJ) suggesting that Japanese authorities might have allocated around ¥6.0 trillion on April 29 and ¥3.66 trillion on May 1 to bolster the JPY.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.