AUD/JPY Slides as BoJ Hike Expectations Surge

AUD/JPY has weakened to around 110.75 in Thursday's early European session, driven by rising expectations of a near-term interest rate hike by the Bank of Japan (BoJ).

According to a Reuters poll, the BoJ is likely to hike interest rates to 1.25% at its September policy meeting and then to 1.75% in the second quarter of 2027.

BoJ board member Kazuyuki Masu warned that the central bank may eventually be forced to raise interest rates rapidly if inflation accelerates, given the country's loose financial conditions.