Anna 
The AUD/JPY pair maintains its upward momentum, nearing 100.30 during Tuesday’s European session, as the Japanese Yen (JPY) remains subdued amidst cautious sentiments from the Bank of Japan (BoJ) regarding future rate hikes.
The persistent gap between Australian and Japanese interest rates provides ongoing support for the AUD/JPY pair. Investor skepticism grows regarding potential interest rate cuts by the Reserve Bank of Australia (RBA) in 2024, particularly in light of positive US data, which suggests the Federal Reserve (Fed) may uphold its higher interest rate stance for a prolonged period.
However, investors remain watchful for potential Japanese intervention to prevent a destabilizing decline in the Yen. BoJ Governor Kazuo Ueda’s focus on inflation and policy outlook underscores expectations for a gradual uptick in inflation. Monitoring data and developments is crucial to assess the realization of this scenario.
Governor Ueda highlights the importance of monitoring annual wage talks’ outcomes and potential increases in service prices, reflecting higher wages, to gauge inflation trends. A sustained acceleration towards the 2% inflation target could pave the way for a reduction in monetary stimulus.
Despite subdued Westpac Consumer Confidence data, the Australian Dollar (AUD) continues its ascent against the Japanese Yen, supported by a robust domestic equity market. Attention remains on the RBA’s interest rate decisions, influencing investor sentiment towards the AUD.
