Australian Dollar dives to six-month low vs Yen after Aussie CPI report, China PMIs

AUD/JPY attracts heavy selling for the second straight day amid a combination of factors.
The AUD adds to the post-RBA losses following the release of rather unimpressive CPI data.
Intervention fears and BoJ rate hike bets underpin the JPY, further weighing on spot prices.

Haresh Menghani FXStreet

The AUD/JPY cross remains under heavy selling pressure for the second consecutive day, falling to a six-month low during the Asian session on Wednesday following the release of Australian consumer inflation figures. Bears now await a sustained break and acceptance below the 109.00 mark before positioning for any further losses.

The Australian Bureau of Statistics (ABS) reported that the headline Consumer Price Index (CPI) rose 0.4% in August, down from 1% recorded in the previous month. Meanwhile, the yearly rate accelerated from 3.5% in July to 4%, and the Trimmed Mean CPI held steady at 3.6% YoY during the reported month. Meanwhile, the data does little to revive bets for another interest rate hike by the Reserve Bank of Australia (RBA) against the backdrop of a mild-dovish tilt by Governor Bullock at the post-meeting press conference on Tuesday. This, in turn, undermines the Australian Dollar (AUD) and continues to exert downward pressure on the AUD/JPY cross.

Meanwhile, Aussie bulls shrugged off China's official PMIs, which showed that business activity in both manufacturing and services sectors recorded growth in September. The Japanese Yen (JPY), on the other hand, draws support from looming intervention fears and hawkish Bank of Japan (BoJ) bets. Japan's top currency diplomat Atsushi Mimura and Finance Minister Satsuki Katayama warned markets to take joint US-Japan messaging on FX depreciation seriously. This follows after US President Donald Trump conveyed his concerns about the JPY's depreciation to Prime Minister Sanae Takaichi on the sidelines of the United Nations General Assembly.

Furthermore, Minutes from the BoJ's July monetary policy meeting, released on Monday, revealed that policymakers debated the need for faster interest rate hikes amid growing concern over mounting inflation risks. This lifted expectations that the BoJ will hike again as soon as October or December. This, in turn, favors JPY bulls and backs the case for a further depreciating move for the AUD/JPY cross.

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.

AUD/USD seems vulnerable near 0.6800, 10-month low amid bullish USD

AUD/USD languishes near a 10-month low during the Asian session on Friday, awaiting a break below 0.6800 before the next leg up amid a bullish US Dollar. Firming Fed rate-hike expectations, along with fading hopes for US-Iran diplomacy, help the USD hold gains at its highest level since April 2025. Moreover, the RBA’s dovish tilt undermines the Aussie and backs the case for further losses.

USD/JPY bulls turn cautious near 160.00 amid intervention risks

USD/JPY enters a bullish consolidation phase around its highest level since early September as bulls turn cautious amid intervention risk near 160.00. Meanwhile, the downside seems cushioned as the wide US-Japan interest rate gap keeps the Yen carry trade active. Furthermore, the possibility of a jumbo Fed rate hike and Middle East uncertainties hold the US Dollar near a 19-month top, supporting the currency pair.

Gold remains on the back foot below $3,900

Gold now alternates gains with losses below the $3,900 mark per troy ounce on Friday. The precious metal struggles to regain traction amid the firmer US Dollar, mixed US Treasury yields and expectations of further tightening by the Fed at its December meeting.

Bitcoin just posted five straight losing weeks, and the storm may not be over yet

Bitcoin is struggling to find support, slipping below $70,000 as multiple headwinds threaten to push the Crypto King lower. The much-anticipated “Uptober” rally failed to materialize, with persistent selling pressure and widespread liquidations instead reinforcing the “Rektober” narrative.

Week ahead – Fed Minutes, inflation data and Nvidia earnings to guide investors

Fed minutes may add to hawkish tone as bets of 50-bps hike grow. Nvidia to report earnings as bar to impress high after spy scandal. Trade and geopolitics to be focal point of Trump-Xi summit.

Gold hit its lowest level of 2026 near $3,850

Gold (XAU/USD) attempts to stabilize around $3,890 on Friday after falling to $3,852 on Thursday, its lowest level since October 2025. The precious metal has lost more than 4% this week, as investors increasingly anticipate further monetary tightening from the Federal Reserve (Fed). The latest decline reflects a sharp change in market expectations.