Ella 
During Friday’s Asian trading session, AUD/JPY was trading weakly below 97.50. Investors will be closely watching interest rate decisions from the Reserve Bank of Australia (RBA) and the Bank of Japan (BOJ) next week. These events may cause market volatility. As of press time, AUD/JPY was trading at 97.35, down 0.27% on the day.
The Reserve Bank of Australia is expected to keep its key interest rate at 4.35% for a third consecutive time at next week’s meeting. Investors have priced in a first rate cut at the June meeting. With inflation remaining high, the RBA is likely to maintain its hawkish stance. However, any hawkish warning from the RBA could weigh on AUD/JPY.
On the other hand, financial markets are divided over whether the Bank of Japan will raise interest rates in March or April. Investors see a rate hike in April as slightly more likely than in March, but cannot rule out a rate hike in March as Japan’s largest companies have given workers the highest wage increases in more than 30 years. Lower bets that the Bank of Japan will end negative interest rates soon could drag the yen lower and become a bullish factor for AUD/JPY.
