Audjpy Trades With Bearish Overtone

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Audjpy Trades With Bearish Overtone

Aud/Jpy Trades Around 97.00 With Bearish Overtone

AUD/JPY is now close to the 97.00 support as the bears continue to raise pressure. In the process, the AUD/JPY has also ended its 4-day winning streak, which is a sign that BoJ's decision has actually boosted the Japanese Yen.

Although the BoJ didn't raise the rates, the comments from officials show that more rate hikes are always on the cards. The current short-term interest rate in Japan is 0.15 - 0.25% and will likely move higher in the next few months.

Boj'S Next Meeting Is In October

For now, the BoJ wants to wait for more data to confirm that rate hikes will not harm the economy. Once they have the confirmation, we will get the next rate hike from BoJ.

The next BoJ meeting will be in October, and the last one will be in December 2024. There's no telling what the BoJ will do next, which means the door remains open to future rate hikes.

Japan's CPI was hotter than expected, which has raised the hopes that BoJ will at least hike the rate one more time this year. So, that's a key factor which will keep the AUD/JPY under pressure.

According to the Japan Statistics Bureau, the CPI for August was 3% y/y. When compared with July's reading of 2.8%, that's quite a jump and shows an increased consumer spending.

As for the core CPI, it also moved from 2.7% to 2.8% in August. This is a sign that inflation is indeed rising and isn't dependent entirely on volatile items.

look at the Australian side shows that the first expected rate cut from RBA will be in November or December 2024. The RBA will likely go with a 25 bps cut to the interest rate policy.

So, that's also something that works in the favor of the JPY and would further push the AUD/JPY lower. On the way down, the next support for AUD/JPY is around 96.00, and finally, the 95.00 handle.

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