Anna 
The AUD/JPY currency pair maintained stability on Tuesday, following gains in the previous session, as the prevailing optimistic mood lent support to the Australian Dollar (AUD). The cross remained underpinned by a relaxed geopolitical climate in the Middle East.
Australia’s Judo Bank Composite Purchasing Managers Index (PMI) surged to a 24-month high of 53.6 in April, indicating an accelerated expansion in the Australian private sector during the second quarter, with significant growth driven by the services sector. This robust PMI data contributed to the positive sentiment surrounding the AUD.
Conversely, the Japanese Yen (JPY) faced challenges due to the expanding yield gap between Japan and many other major countries, prompting traders to borrow JPY and invest in higher-yielding assets elsewhere.
Additionally, Reuters reported that Bank of Japan (BoJ) Governor Kazuo Ueda reiterated on Tuesday that the central bank would consider raising interest rates again if trend inflation accelerates toward its 2% target, in line with its forecast. Ueda also mentioned the difficulty in predicting the ideal timeframe for the BoJ to gather sufficient data before considering a policy change.
The combination of upbeat PMI data from Australia and the yield differentials between Japan and other major economies influenced the stability of the AUD/JPY cross. Traders will continue to monitor geopolitical developments and central bank communications for further insights into currency movements.
