AUD/JPY juggles below 90.00 as investors await BoJ policy

The AUD/JPY pair displays topsy-turvy moves in a narrow range below the round-level resistance of 90.00 in the early Asian session. The risk barometer is demonstrating a sideways auction ahead of the announcement of the first monetary policy of CY2023 by the Bank of Japan (BoJ). AUD/JPY is following the footprints of consolidating AUD/USD, portraying an ambiguity in the risk profile.

Broadly, the cross is gradually scaling higher from Friday as investors expect that the BoJ might not come up with any policy change as it could trigger financial market risk, and efforts of ramping inflation might be unsuccessful. Earlier, the BoJ announced that the central would review the side effects of the decade-long ultra-loose monetary policy, which created an expression that the central bank is keen to exit from the easy policy.

Analysts at Standard Charted expect the BoJ to keep the policy balance rate and the 10Y yield target unchanged at -0.1% and 0%, respectively. They further added that policymakers would assess the potential impact of the recent decision to widen the 10-year JGB band to +/-50 bps (from +/-25 bps) at its December meeting.

Development over the successor for current BoJ Governor Haruhiko Kuroda will be keenly watched. Reuters reported on Tuesday that the new BoJ governor nominee, likely to be presented to parliament on Feb 10, has provided some development. Career c.bankers Amamiya, Nakaso, and Yamaguchi are seen as top candidates

On the Australian front, investors are awaiting the release of the employment data, which is scheduled for Thursday. As per the consensus, the Unemployment Rate is expected to remain steady at 3.4%. Apart from that, the Australian economy must have added 22.5K fresh jobs in the labor market in December, lower than the former additions of 64K.