The AUD/JPY pair maintained its upward trajectory for the third consecutive session on Tuesday, hovering around 104.50 during the European trading hours. The appreciation of the cross is primarily attributed to the weakened Japanese Yen (JPY) following the release of the Bank of Japan‘s (BoJ) latest data earlier in the day.
Japanese Economic Indicators
Japan’s Weighted Median Inflation Index, a crucial measure of the nation’s inflationary trends, exhibited a modest increase of 1.1% in April, decelerating from the 1.3% surge registered in March. However, the Japanese Yen briefly gained ground during the early Asian session, bolstered by the robust Corporate Service Price Index (CSPI), which recorded a year-over-year reading of 2.8% in April, surpassing market expectations and marking its most rapid acceleration since March 2015.
Japanese Finance Minister’s Remarks
In the realm of currency dynamics, Japan Finance Minister Shun’ichi Suzuki emphasized the significance of currencies maintaining stability reflective of underlying fundamentals. Suzuki affirmed close monitoring of foreign exchange (FX) movements but refrained from commenting on whether Japan has intervened in currency markets.
Australian Economic Landscape
Despite softer figures in Australia’s Retail Sales (MoM), which saw a marginal 0.1% uptick in April, rebounding from a previous 0.4% decline but falling short of market projections of 0.2%, the Australian Dollar (AUD) continued to strengthen.
RBA Meeting Minutes
Furthermore, the latest meeting minutes from the Reserve Bank of Australia (RBA) revealed the board’s struggle in forecasting future changes in the cash rate. The minutes acknowledged recent data, suggesting a heightened likelihood of inflation persisting above the 2-3% target range for an extended duration.
