Anna 
During the European trading hours on Friday, the AUD/JPY pair experienced a slight recovery from its daily losses, hovering around the 97.50 level. The cross encountered resistance as the Japanese Yen strengthened, fueled by market speculation surrounding a potential shift in the Bank of Japan’s policy stance. Reports indicating major Japanese companies’ full compliance with union demands for wage hikes contributed to the Yen’s strength.
Moreover, Reuters cited Japanese news agency Jiji on Thursday, reporting that the Bank of Japan is considering discontinuing its negative interest rate policy during the upcoming March 18-19 meeting. The final decision hinges on the outcome of a preliminary survey by the labor organization Rengo regarding this year’s spring wage negotiations, expected on Friday.
Conversely, the AUD/JPY pair witnessed a modest uptick as the Australian Dollar weakened amidst a widespread market downturn, particularly evident in the lower S&P/ASX 200 Index. Australian equities mirrored the losses observed on Wall Street, with notable declines observed in the banking and iron ore mining sectors.
Despite prevailing challenges, the AUD/JPY cross may find support as the Reserve Bank of Australia (RBA) maintains its potential stance for further rate hikes. Analysts, as per a Reuters poll conducted before the RBA meeting, anticipate the central bank to maintain its official cash rate unchanged at 4.35% for a third consecutive meeting, with no expected adjustments until at least the end of September.
Looking ahead, market focus remains on the upcoming policy decisions by both the RBA and the Bank of Japan scheduled for Tuesday, intensifying anticipation surrounding monetary policy directions.
