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AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.
USD/JPY catches some bids in the Asian session on Friday after data showed Japan's core consumer inflation held near the BoJ’s 2% target in August. The pair trades above 156.00 as traders await the BoJ's expected interest rate hike to a 31-year high. Meanwhile, softer US bond yields undermine the US Dollar, capping the pair's upside.
Gold trades with a positive bias for the second straight day and holds around $4,350 during Friday's Asian session, though upside seems capped. US bond yields move away from multi-year highs amid a pullback in oil prices, capping the US Dollar and supporting the non-yielding bullion. However, the Fed's hawkish stance and geopolitical risks limit USD losses, keeping XAU/USD below the weekly top, set on Thursday.
Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.
