AUD/JPY extends gains after status quo RBA decision

AUD/JPY jumped nearly 30 pips to hit a session high of 74.67 after the Reserve Bank of Australia kept interest rates unchanged at 0.75%, as expected. 

The policy statement said the risks are still tilted to the downside, however, some of the downside pressures have weakened recently. Further, the RBA said the jobless rate will drop below 5% in 2020, 2021.

While the bank reiterated that the Australian economy appears to have reached a gentle turning point, it maintained that low-interest rates will be required in Australia to reach full employment and achieve the inflation target.

Further, the central bank expressed willingness to ease monetary policy further if needed to support sustainable growth in the economy. 

All in all, the policy statement carried a slightly optimistic tone and that is likely boding well for the aussie dollar. 

Looking forward, the pair may continue to take cues from the broader market sentiment. As of writing, the futures on the S&P 500 are reporting a 0.22% gain, supporting the gains in AUD/JPY. 

Technically speaking, the pair has bounced up strongly from the support of the trendline rising from August and October lows, reinforcing the bullish bias. 

Technical levels