Ella 
In early European trading on Tuesday, the Australian dollar/yen crossed higher. AUD/JPY was boosted by yen weakness following the Bank of Japan (BoJ) monetary policy meeting. As of press time, the Australian dollar/yen was trading at 96.50, up 0.73% on the day.
On Tuesday, the Bank of Japan decided to keep its short-term interest rate target and 10-year JGB yield target unchanged at -0.1% and 0%, respectively. AUD/JPY attracted some bulls and hit a daily high of 96.61 following the Bank of Japan policy statement. Separately, Japan’s Finance Ministry is considering bringing forward plans to cut $1.39 billion in 20-year bonds scheduled to begin in January, Reuters reported.
In terms of the Australian dollar, the minutes of the Reserve Bank of Australia’s December meeting showed that the central bank saw encouraging signs of improvement in inflation, but this needs to be sustained. The RBA said the need for further policy tightening would be determined by newly released data and evolving risk assessments, while adding that inflation expectations remained consistent with the inflation target. More hawkish comments from the Reserve Bank of Australia boosted AUD/JPY.
Traders will be keeping a close eye on Japan’s trade balance for November and Australia’s Westpac Leading Index, which will be released on Wednesday. On Friday, Japan will release its national consumer price index. Traders will look to this data for AUD/JPY trading opportunities.
