Australian Dollar holds losses against Japanese Yen following BoJ rate decision

AUD/JPY holds losses as the Japanese Yen remains stronger following the BoJ policy decision.
The BoJ decided to keep policy rate unchanged at 1.25%, as expected.
AS of October 29, ASX futures indicated an 80% chance of an RBA rate hike to 4.85%.

Akhtar Faruqui FXStreet

AUD/JPY loses ground for the second consecutive day, trading around 110.80 during Asian hours on Friday. The currency cross holds losses as the Japanese Yen (JPY) remains stronger after the Bank of Japan (BoJ) board members decided to leave the short-term interest rate unchanged at 1.25% following the conclusion of its two-day monetary policy review meeting.

The downside of the AUD/JPY cross could be restrained as the Australian Dollar (AUD) receives support from expectations of further policy tightening by the Reserve Bank of Australia (RBA). Hotter-than-expected inflation data and hawkish comments from RBA officials have led markets to increasingly price in a rate hike at the central bank's upcoming November 3 meeting.

As of October 29, the ASX 30-day interbank cash rate futures November 2026 contract was trading at 95.22, signaling an 80% probability of an interest rate increase to 4.85% at the next RBA Board meeting.

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Economic Indicator

BoJ Interest Rate Decision

The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.

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