Anna 
During Friday’s European session, the AUD/JPY pair surged to an all-time high near 99.00, extending its winning streak initiated on February 14. The market is rife with concerns over a potential delay in the Bank of Japan’s (BoJ) plan to exit negative interest rates, particularly following last week’s data revealing the Japanese economy’s entry into a technical recession. This bearish sentiment surrounding the Japanese Yen (JPY) is bolstering the AUD/JPY cross.
Global money markets are experiencing a surge as investors grapple with dashed hopes for interest rate cuts by major central banks worldwide, applying further downward pressure on the safe-haven Japanese Yen (JPY). Conversely, Australia’s S&P/ASX 200 index surged following Wall Street’s overnight rally, providing upward momentum for the Australian Dollar (AUD). This collective momentum is driving the strength of the AUD/JPY cross.
Investors continue to engage in borrowing Japanese Yen (JPY) to invest in higher-yielding assets denominated in other currencies. However, recent verbal intervention by Japanese authorities, including Vice Finance Minister for International Affairs Masato Kanda’s statement last week indicating readiness for necessary actions, may offer some support for the JPY.
Earlier in the week, the Japanese Yen received a boost from better-than-expected Trade Balance figures released by Japan’s Ministry of Finance. Market participants are eagerly anticipating the release of Japan’s National Consumer Price Index (CPI) data scheduled for Tuesday.
The Australian Dollar (AUD) found support from domestic PMI data, revealing private sector activity returning to growth in February for the first time in five months, driven by a robust expansion in the services sector. Furthermore, market sentiment suggesting no immediate rate cuts following the recent Reserve Bank of Australia (RBA) Meeting Minutes buoyed the Aussie Dollar.
