AUD/JPY Surges Ahead of Expected RBA Rate Hike

The Australian Dollar (AUD) strengthened against the Japanese Yen (JPY) to around 110.85 on Monday, ending its four-day losing streak.

This move was largely driven by expectations of a more hawkish stance from the Reserve Bank of Australia (RBA), which is set to raise the Official Cash Rate by 25 basis points to 4.60% at its meeting on Tuesday.

Market consensus pointed to this rate hike, with ANZ analysts noting that the RBA tends to view oil price increases as an inflationary shock rather than a growth shock.

The Australian Dollar gained ground against the US Dollar, supported by persistent inflation and expectations of further tightening from the RBA.