Anna 
During Wednesday’s European session, the AUD/JPY pair hovered around the 102.00 level, with the Australian Dollar (AUD) facing downward pressure following the Reserve Bank of Australia (RBA)’s decision to maintain its interest rate at 4.35% announced on Tuesday.
Investor sentiment turned cautious regarding the RBA’s stance, particularly after March’s unexpected surge in Australian monthly inflation, which contrasted with market expectations of stagnation. RBA Governor Michele Bullock emphasized the importance of monitoring inflation risks and expressed confidence that current interest rates are suitably positioned to guide inflation back within the target range of 2-3% by the latter half of 2025 and toward the midpoint by 2026. However, the RBA maintained a cautious outlook, refraining from definitive commitments.
Meanwhile, the Japanese Yen (JPY) saw appreciation last week amid speculation surrounding potential intervention by Japanese authorities. Reuters reported data from the Bank of Japan (BoJ) suggesting interventions totaling approximately ¥6.0 trillion on April 29 and ¥3.66 trillion on May 1 aimed at shoring up the JPY. Despite these efforts, the interventions only provided temporary respite due to substantial interest rate differentials between Japan and the United States (US).
Japanese authorities continue to warn against extreme currency fluctuations, with Finance Minister Shunichi Suzuki reiterating readiness to address excessive foreign exchange volatility. Bank of Japan (BoJ) Governor Kazuo Ueda emphasized the necessity of assessing the impact of Yen movements on inflation to guide future policy decisions.
The AUD/JPY pair remains influenced by these factors, including RBA policy outlook and intervention speculation surrounding the Japanese Yen, shaping trading dynamics amid ongoing market uncertainties.
