- AUD/JPY fails to capitalize on the overnight goodish rebound from a multi-day low.
- BoJ Governor Ueda's hawkish remarks underpin the JPY and cap gains for the cross.
- The RBA’s decision to leave interest rates unchanged fails to provide any impetus.
The AUD/JPY cross attracts some sellers following an Asian session uptick on Tuesday and stalls the overnight bounce from the 103.60-103.55 area or a multi-day low. Spot prices remain on the defensive after the Reserve Bank of Australia (RBA) announced its policy decision and currently trade just above the 104.00 round-figure mark.
As was widely anticipated, the RBA decided to keep the Official Cash Rate (OCR) unchanged at a 12-year high level of 4.35% for the fifth successive meeting in June and retained its hawkish stance. The central bank, meanwhile, is expected to leave the door open for a rate hike this year in the wake of still sticky inflation, which, in turn, could act as a tailwind for the Australian Dollar (AUD) and lend support to the AUD/JPY cross.
Data released from China on Monday underlined a bumpy recovery in the world's second-largest economy. This overshadows the RBA's higher for longer interest rate narrative and undermines antipodean currencies, including the Aussie. Meanwhile, the Japanese Yen (JPY) benefits from the Bank of Japan (BoJ) Governor Kazuo Ueda's remarks, saying that the central bank could raise rates in July depending on economic data.
Apart from this, speculations that Japanese authorities might intervene to prop up the domestic currency further contribute to the AUD/JPY pair's downtick. That said, a generally positive risk tone, which tends to dent demand for the safe-haven JPY and lend support to the risk-sensitive Australian Dollar (AUD), should help limit any meaningful downfall ahead of the RBA Governor Michele Bullock’s press conference at 05:30 GMT.
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