Audjpy Trades Strong On High Rates

 Audjpy Trades Strong On High Rates

Aud/Jpy Trades Near 98.50 On Prospects Of High-Interest Rates

AUD/JPY is on the path to close the 5th session in green and can be seen near 98.50. The bottom line is that all the prospects hint at a stronger Australian Dollar against the Japanese Yen (JPY).

The upward trajectory of AUD/JPY is the market's sentiment that the Australian economy will remain resilient. Additionally, the RBA is expected to keep the interest rates high while the unemployment rate remains low.

Rba Thinks About Rate Hike In 2024

All of these factors support a stronger AUD against the JPY. To top it all off, various firms, such as Westpac, are hinting that the RBA will keep interest rates unchanged in 2024. Starting next year (2025), the RBA will move towards a less restrictive approach.

However, not all is good with the Australian Dollar (AUD), which means there's also a chance of downside in AUD/JPY. Australia's money market is still weak, while the ASX 200 index appears to have approached a formidable resistance.

Talking about the Australian stock market, the key sectors such as mining and energy are in decline as the commodity prices have weakened. So, that's one factor preventing the AUD/JPY from turning downright bullish.

The RBA's February meeting minutes also reveal that the central bank is considering keeping the interest rates at current levels or going with a 25 bps rate hike. There was no talk of a rate cut in both cases, strengthening the AUD.

Keeping the interest rate aside, the RBA is confident that the inflation levels will fall towards the target range. However, this doesn't mean the rate hikes are out of the window.

On the JPY front, the government is in talks with other countries to discuss the FX intervention. According to sources, the government can sell foreign bonds to intervene in the currency market.

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