AUD/JPY Soars on Hot Inflation Data and Rising Rate Hike Expectations

The AUD/JPY cross has surged to near 114.50 as hotter-than-expected Australian inflation data bolsters market expectations for a Reserve Bank of Australia interest rate hike.

Traders are now pricing in a 38% chance of a fourth RBA rate increase this year, up from just 17% before, with a move in September now considered likely.

The Australian Consumer Price Index (CPI) inflation data showed a 1.0% monthly rise in July, exceeding forecasts of a 0.8% increase.