AUD/JPY Fights Bearish Bias Near 110.70 Amid BoJ Hike Expectations

AUD/JPY is trading near 110.70 in early European dealings on Wednesday, supported by a weaker JPY due to higher energy prices that weigh on Japan's import bill.

Market expectations center on a 25-basis-point BoJ rate hike at the upcoming policy meeting, which would take borrowing costs to their highest level since April 1995. The Bank of Japan is expected to raise interest rates by 25bps to 1.25% at its next meeting, according to analysts at Standard Chartered.

The cross remains below its 100-day SMA with an RSI near oversold territory, keeping the near-term technical bias tilted to the downside. Despite this, a temporary corrective bounce cannot be excluded.