AUD/JPY Climbs After Strong Australian Inflation Data
The Australian dollar (AUD) went up against the Japanese yen (JPY) after new inflation numbers from Australia came out higher than expected. Prices in August rose by 3.0% compared to last year.
This was more than July’s 2.8% and also a little higher than the 2.9% that markets had expected. Because of this, traders believe the Reserve Bank of Australia (RBA) may not cut interest rates soon. Higher inflation often supports the value of a currency, and this helped the Aussie rise.
In Japan, the data was weaker. The manufacturing sector slowed further, with the PMI falling to 48.4 in September from 49.7 before. A number below 50 shows contraction. This weak outlook reduces chances that the Bank of Japan (BoJ) will raise interest rates quickly, which keeps pressure on the yen.
With strong Australian data and weak Japanese data, the AUD/JPY pair bounced back from near 97.20 and touched a weekly high close to 98.00. Still, the upward move may face limits. Traders are watching if the BoJ will go ahead with a possible 25 basis point rate hike in October. Also, demand for safe-haven currencies could rise if global markets turn risk-off, which may slow gains.
Impact:
AUD/JPY might stay strong if Australian inflation remains high. But the pair could face pressure if the BoJ turns hawkish or global risk worries increase.