AUD/JPY Surges as China Data Lifts Aussie Against Yen

The AUD/JPY currency pair continued its advance in early European trading hours on Tuesday, reaching near 114.60 as China's manufacturing PMI rose to 51.5 in August from 50.9 in July.

This surpassed market expectations of 50.9 and contributed to the Australian Dollar's strength against the Japanese Yen.

Market participants are pricing in a high likelihood of a Bank of Japan rate hike this month, with implied odds near 85% cited by some strategists.

Analysts at OCBC FX warn that while a September move would break from the BoJ's pattern in the current tightening cycle, it will be difficult for the BoJ to out-hawk market expectations.