AUD/JPY surges to near 102.00 due to hawkish RBA ahead of policy decision

AUD/JPY gains ground due to hawkish sentiment surrounding the RBA. RBA is expected to maintain the cash rate at a 12-year high of 4.35% on Tuesday. Japanese markets are closed on Monday due to a national holiday, with the potential for intervention by Japanese authorities. AUD/JPY continues to gain ground, tradingaround 101.90 during the European trading hours on Monday, buoyed by a hawkish sentiment surrounding the Reserve Bank of Australia .

Last week, the Japanese Yen appreciated amidst potential government intervention by Japanese authorities. Reuters reported that data from the Bank of Japan indicated that Japanese authorities may have allocated approximately ¥6.0 trillion on April 29 and ¥3.66 trillion on May 1 to reinforce the JPY. The perceived market intervention by Japanese authorities provided only temporary relief, as the underlying market fundamentals continue to weigh bearishly on the Japanese Yen.

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AUD/JPY appreciates due to the likelihood of RBA to avoid rate cutsAustralia's 10-year bond yield surged to 4.1%, marking its highest level in over a month. The diminished geopolitical tension could weaken the safe-haven JPY. AUD/JPY continues to move in the positive direction, rising to near 99.90 during the European session on Monday. This rise is attributed to the appreciation of the Australian Dollar (AUD), supported by gains in the domestic equity market. The ASX 200 Index experienced upward momentum during the opening session of the week, particularly fueled by a surge in tech stocks. Additionally, Australia's 10-year government bond yield climbed to nearly 4.1%, reaching over one-month highs. This increase follows a rally in US bond yields, driven by stronger-than-expected US jobs data. Speculation has arisen that the Federal Reserve may maintain higher interest rates for an extended period
Source: FXStreetNews - 🏆 14. / 72 Read more »