AUD/JPY rises to near 101.30 as Australian CPI grows faster than expected by 3.8%

AUD/JPY moves higher to near 101.30 as the Australian inflation accelerates to 3.8% year-on-year in October.
Hot Australian inflation may restrict RBA policymakers from reducing interest rates.
This week, investors will pay close attention to the Tokyo’s CPI data for November.

Sagar Dua FXStreet

The AUD/JPY pair jumps to near 101.30 after the release of the Australian Consumer Price Index (CPI) data for October. The Australian Bureau of Statistics (ABS) has reported that inflationary pressures rose to 3.8% on an annualized basis, faster than expectations of 3.6% and the prior release of 3.5%.

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.01%	-0.02%	0.08%	-0.01%	-0.20%	-0.16%	0.04%
EUR	0.01%		-0.00%	0.09%	0.00%	-0.18%	-0.11%	0.05%
GBP	0.02%	0.00%		0.10%	0.00%	-0.18%	-0.11%	0.06%
JPY	-0.08%	-0.09%	-0.10%		-0.09%	-0.27%	-0.20%	-0.03%
CAD	0.00%	-0.00%	-0.01%	0.09%		-0.20%	-0.13%	0.05%
AUD	0.20%	0.18%	0.18%	0.27%	0.20%		0.07%	0.24%
NZD	0.16%	0.11%	0.11%	0.20%	0.13%	-0.07%		0.17%
CHF	-0.04%	-0.05%	-0.06%	0.03%	-0.05%	-0.24%	-0.17%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

This is the fourth straight month when inflation in the Australian region has grown at a faster-than-expected pace. The scenario of accelerating price pressures is expected to prompt Reserve Bank of Australia (RBA) policymakers to support holding interest rates at their current levels for longer.

In the monetary policy meeting earlier this month, the RBA held its Official Cash Rate (OCR) steady at 3.6%, citing that housing and rental inflation expectations could de-anchor in the near term. Officials also stated that any interest rate cut at this point could stop inflation from falling.

Meanwhile, the Japanese Yen (JPY) has been underperforming its peers from the past few trading sessions, even as officials from Japan have been warning of stealth intervention. Japan has excessive foreign reserves, so it can become active in tapping them to conduct (yen-buying) intervention," said Takuji Aida, an adviser to Prime Minister Sanae Takaichi, Reuters reported.

This week, the major trigger for the Japanese Yen will be the Tokyo CPI data for November, which will be published on Friday. Economists expect the Tokyo headline CPI to have grown by 2.7% year-on-year, slower than 2.8% in October. Signs of price pressures growing at a moderate pace would undermine expectations of more interest rate hikes by the Bank of Japan (BoJ) in the near term.

Economic Indicator

Consumer Price Index (YoY)

The Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a comprehensive basket of goods and services acquired by household consumers. The indicator is the primary measure of headline inflation after a new methodology was applied to transition from quarterly to monthly readings, applying to data from April 2024 onwards. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.

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