AUD/JPY Falls Near 94.50 as Inflation Expectations Drop in Australia
The AUD/JPY currency pair has slipped near 94.50, recording losses for the third day in a row. This move came after new data showed that Australians expect prices to rise less than before. In August, inflation expectations increased by 3.9%, compared to 4.7% earlier.
Australia’s economy showed some positive signs. Manufacturing PMI rose to 52.9 and services PMI reached 55.1, both above the 50 mark that signals growth. The composite PMI also improved to 54.9 from 53.8. Even with this good data, the Australian dollar stayed weak in forex trading.
The Reserve Bank of Australia (RBA) is being watched closely. After cutting interest rates last week, traders now believe the central bank could make a bigger 50 basis-point cut in November if inflation stays soft.
Meanwhile, the Japanese yen is also struggling. The Bank of Japan (BoJ) has not changed its stance, as Governor Kazuo Ueda said inflation has not firmly reached the 2% goal. This makes forex traders cautious about the yen’s next move.
Impact:
The AUD/JPY pair might keep falling if inflation stays low in Australia and RBA cuts rates again, while BoJ’s cautious stance could limit yen gains.