AUD/JPY gains momentum to the mid-96.00s following the BoJ rate decision
|- AUD/JPY attracts some buyers to 96.50 after the Bank of Japan's (BoJ) monetary policy meeting.
- BoJ decided to maintain the status quo and keep the Yield Curve Control (YCC) policy unchanged.
- The Reserve Bank of Australia stated that whether further tightening is required would be decided by data and assessment of risks.
- Market players await November’s Japanese Trade Data and the Australian Westpac Leading Index, due on Wednesday.
The AUD/JPY cross gains traction during the early European session on Tuesday. The upward momentum of the cross is supported by the Japanese Yen (JPY) weakness following the Bank of Japan's (BoJ) monetary policy meeting. At press time, AUD/JPY is trading at 96.50, up 0.73% on the day.
On Tuesday, the BoJ decided to maintain the status quo and keep the short-term interest rate target and the 10-year JGB yield target unchanged at -0.1% and 0%, respectively. In response to the BoJ policy announcements, the cross has attracted some buyers and reached an intraday high of 96.61. Furthermore, the Japanese Finance Ministry is considering bringing forward its plan to reduce 20-year bonds by $1.39 billion from January, per Reuters.
On the Aussie front, the Reserve Bank of Australia (RBA) meeting minutes of December suggested that the central bank saw encouraging signs of progress on inflation, but this needed to continue. The RBA stated that whether further tightening is required would be decided by incoming data and the evolving assessment of risks, while adding that inflation expectations remained consistent with the inflation target. The more hawkish remarks from the RBA lift the Australian Dollar (AUD) against the JPY.
Traders will keep an eye on November’s Japanese Trade Data and the Australian Westpac Leading Index, due on Wednesday. On Friday, Japan’s National Consumer Price Index will be released. Traders will take cues from these figures and find trading opportunities around the AUD/JPY cross.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.