The AUD/JPY currency pair has halted its winning streak, which began on September 16, and is trading around 98.60 during the early European session on Friday. The Japanese Yen (JPY) has strengthened following the election of former Defense Chief Shigeru Ishiba as the new prime minister of Japan. However, the JPY is also experiencing downward pressure due to increasing concerns regarding the Bank of Japan’s (BoJ) interest rate outlook.
On Friday, the Tokyo Consumer Price Index (CPI) reported a year-on-year increase of 2.2% for September, a decline from the 2.6% rise recorded in August. Additionally, the CPI excluding fresh food and energy remained steady at a 1.6% year-on-year increase. The CPI excluding fresh food increased by 2.0%, in line with expectations, compared to a prior rise of 2.4%.
Despite these mixed inflation figures, the AUD/JPY cross may find upward momentum supported by recent stimulus measures announced in China, Japan’s largest trading partner. Additionally, the dovish outlook from the Federal Reserve (Fed) has improved market sentiment for risk-sensitive currencies like the Australian Dollar (AUD).
Australian Treasurer Jim Chalmers is currently in China to enhance economic relations between the two nations. During his visit, he engaged in open and productive discussions with the National Development and Reform Commission (NDRC), emphasizing that China’s economic slowdown has contributed to weaker global growth. Chalmers welcomed the country’s new stimulus initiatives as a “really welcome development,” which could bolster support for the AUD.
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