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Australian Dollar falls sharply against Yen after RBA’s monetary policy decision

  • The Australian Dollar drops against its peers as the RBA leaves its OCR steady at 4.355, as expected.
  • Investors await RBA Governor Bullock’s press conference.
  • Japan’s Current Account slips into deficit in June for the first time since January 2025.

The Australian Dollar (AUD) faces selling pressure against its major currency peers, trading 0.15% lower at around 112.20 against the Japanese Yen (JPY) during the Asian trading session on Tuesday.

The antipodean comes under pressure as the Reserve Bank of Australia (RBA) has left the Official Cash Rate (OCR) unchanged at 4.35% for the second meeting in a row.

Financial markets had already anticipated the RBA would maintain the status quo as Australian inflation came in lower than projected in the second quarter this year.

RBA seen on hold as TD Securities highlights restrictive policy and softer inflation

According to TD Securities, the RBA is now firmly in “pause and observe mode” as “policy is viewed to be restrictive,” with domestic “activity (especially housing) slowing in response to earlier hikes” and “the full impact of earlier hikes yet to be felt.” The strategists note that “lower-than-expected Q2 trimmed mean CPI gives the RBA space to pause at the August meeting,” adding that OIS markets are “pricing close to 0% odds of a hike.” In this context, TD Securities state, “we expect the RBA to keep the cash rate at 4.35% (consensus: 4.35%).”

For now, investors await remarks from RBA Governor Michele Bullock regarding the monetary policy outlook, whose press conference is scheduled at 05:30 GMT.

Meanwhile, the Japanese Yen (JPY) trades higher against its major peers on Tuesday, but weak Current Account data for June has raised concerns over its economic outlook.

On Monday, Japan’s Ministry of Finance (MoF) reported that the nation’s Current Account surprisingly slipped into deficit for the first time since January 2025. The deficit was at JPY 92.3 billion, while the data was expected to remain in surplus at JPY 1,512 billion. In May, the current account surplus was at JPY 3,968.3 billion.

Economic Indicator

RBA Governor Bullock speech

Michele Bullock is the the ninth Governor of the Reserve Bank of Australia. She commenced her current position in September 2023, replacing Philip Lowe. Bullock was the Assistant Governor (Financial System) at the Reserve Bank of Australia, a position she held since October 2016.

Read more.

Next release: Thu Aug 13, 2026 23:30

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Author

Sagar Dua

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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