AUD/JPY aims establishment above 96.00 ahead of RBA minutes, BOJ policy eyed
- AUD/JPY stabilizes above 96.00, more upside seems favored ahead of RBA minutes.
- The BOJ is expected to avoid a dovish commentary and will shift to a ‘neutral’ stance on interest rates.
- Japan’s National core CPI is seen higher at 1.7% vs. 1.2% on costly oil imports amid a weaker yen.
The AUD/JPY pair has faced a less-confident hurdle at 96.20 after a firmer rebound from the critical support of 95.60 in the Asian session. The cross is expected to demolish the above-mentioned hurdle sooner and will resume its upside journey above 96.50. The asset is expected to display topsy-turvy moves ahead of the interest rate decision by the Bank of Japan (BOJ), which will be announced on Thursday.
As BOJ is preparing for an intervention in the Fx moves to support the depreciating yen against the G-7 currencies, a shift in policy stance is highly expected by the market participants. BOJ’s Haruhiko Kuroda is not in a position to scale up the interest rates as the price rise index and Japan’s growth rate are not supporting the same. The economy has failed in accelerating price pressures despite a prolonged ultra-loose monetary policy. So a ‘neutral’ stance is expected and no further stimulus will be provided.
But before that, the release of Japan’s National Consumer Price Index (CPI) also holds significant importance. The headline CPI is expected to remain steady at 2.6% while the core CPI will scale higher to 1.7% against the former print of 1.2%. The depreciating yen is resulting in costly fossil fuels for Japan and eventually higher energy bills for households.
On the Aussie front, investors focusing on the release of the minutes from the Reserve Bank of Australia (RBA) of the September monetary policy meeting. This will provide a detailed version of the ideology of the RBA policymakers behind announcing a fourth consecutive 50 basis points (bps) interest rate hike. Also, it will provide the current economic situation and further prospects.