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AUD/JPY Appreciates as Anticipations of a More Hawkish RBA Increase
The AUD/JPY continues its winning trend following Wednesday's publication of the stronger Australian CPI. The yield on 10-year Australian government bonds has increased to 4.49%, approaching five-month highs, as expectations of RBA rate decreases diminish. The Japanese Yen continues to depreciate on Friday, when the Bank of Japan is anticipated to refrain from instituting rate hikes.
On Thursday, the AUD/JPY pair advances for the fourth consecutive session. The Australian Dollar (AUD) gained strength subsequent to the disclosure of Australian Consumer Price Index (CPI) figures on Wednesday, which surpassed market anticipations. This occurrence suggests that the Reserve Bank of Australia (RBA) may adopt a more aggressive approach to monetary policy, which could strengthen the Australian dollar (AUD) and consequently invigorate the AUD/JPY pair.
The yield on 10-year Australian government bonds has risen above 4.49 percent, approaching five-month highs, on the back of resilient domestic inflation data that has bolstered expectations that the RBA will postpone interest rate reduction. Furthermore, the mitigation of tensions in the Middle East has contributed to a favorable market sentiment, which has been advantageous for currencies that are sensitive to risk, such as the AUD.
Ahead of Friday's scheduled publication of the Bank of Japan's (BoJ) Monetary Policy Statement, the Japanese Yen (JPY) continues to depreciate. Widespread opinion holds that the Bank of Japan will refrain from instituting rate increases during this meeting.
Nikkei reports that the BoJ is likely to deliberate on the "impact of accelerating Yen depreciation," suggesting that if the JPY weakens, the central bank may intervene in foreign exchange markets.
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