Ella 
In the Asian market on Friday, the Australian dollar/yen gave up the gains of the previous trading day and traded around 96.30. The Japanese yen (JPY) fluctuated higher against the Australian dollar as a rise in real wages in July fueled speculation that the Bank of Japan (BoJ) could raise interest rates again before the end of 2024.
Japan’s labor cash income increased by 3.6% year-on-year, which was slower than the 4.5% increase in June, but hit a new high since January 1997, exceeding the expected value by 3.1%.
The yen was also supported by hawkish comments from Bank of Japan (BOJ) Governor Hajime Takata on Thursday. “If the economy and price trends are in line with our forecasts, we will adjust the policy interest rate in several stages,” Takada said.
Bank of Japan Governor Takada also stressed that the domestic economy is recovering moderately despite some signs of weakness. Although stock and foreign exchange markets face significant volatility, Takada stressed that the Bank of Japan remains optimistic about achieving its inflation target.
The AUD/JPY cross strengthened as the Aussie found support from positive trade balance data released on Thursday. Australia’s trade balance surplus widened to A$6.009 billion in July, exceeding the expected value of A$5.150 billion and the previous estimate of A$5.589 billion.
In addition, Reserve Bank of Australia Governor Bullock delivered a speech titled “The Price of High Inflation” at the “Annika Foundation” in Sydney, saying that it is too early to consider cutting interest rates. Currently, the board does not expect to cut interest rates in the near term.
