AUDJPY inclines towards 94.00 ahead of RBA policy minutes

The AUDJPY pair has extended its recovery after overstepping the immediate hurdle of 93.50 in the Tokyo session. The risk barometer is now marching towards the round-level hurdle of 94.00 as volatility has been trimmed amid a stellar recovery in the S&P500. Also, US Treasury yields have witnessed a bloodbath after a significant drop in inflation numbers.

Earlier, the cross found fresh demand near 93.00 after remaining in a negative trajectory for the past two trading sessions. The asset has picked bids as investors are shifting their focus toward the Reserve Bank of Australia (RBA)’s monetary policy minutes.

The RBA minutes will display the entire reasoning behind the announcement of the interest rate hike by 25 basis points (bps) despite a historic surge in inflationary pressures. For the third quarter, Australia’s inflation rate climbed to 7.3% vs. the projections of 7.0% and the prior release of 6.1%.

RBA Governor Philip Lowe was expected to return to a 50 bps hike regime for the Official Cash Rate (OCR). It seems that the RBA wants to capitalize on its frequent monetary policy meetings by announcing smaller rate hikes.

Meanwhile, Japan's top currency diplomat Masato Kanda reiterated that officials are closely watching forex market moves with a high sense of urgency and that if needed. ''Authorities remained ready to take action.'', reported Reuters.

On the economic data front, investors are awaiting the release of Tuesday’s Gross Domestic Product (GDP) report. The economic data is seen lower at 0.3% vs. the prior release of 0.9% on a quarterly basis while the annualized figure may decline to 1.1% from the former release of 3.5%.