AUD/JPY Gains but Bearish Trend Persists Ahead of BoJ Clues
The Australian Dollar (AUD) against the Japanese Yen (JPY) is trading higher near 110.20 during early European trading on Tuesday. Investors are waiting for Bank of Japan (BoJ) Governor Kazuo Ueda’s speech later in the day for clues on future interest rate movements. The BoJ may signal that underlying inflation is close to its 2% target, suggesting potential rate hikes in the coming months. However, some policymakers prefer to assess more economic data before making another move.
On the Australian side, markets now see a lower chance of a Reserve Bank of Australia (RBA) rate hike in November, with probabilities falling to around 20%. Inflation data from Japan and Korea is keeping central banks on alert. Korea’s consumer price index (CPI) eased to 2.9% year-over-year in September, while Japan’s Tokyo CPI accelerated to 2.7%, above expectations. Core Tokyo CPI, excluding fresh food and energy, rose to 3.0%, its highest under the current administration.
Technically, AUD/JPY remains bearish in the short term, trading below key moving averages and the Bollinger middle band. Resistance levels are seen at 110.60 and 112.15, while support lies at 110.00 and 109.10. A decisive break below 110.00 could push the pair toward the October low of 108.71.