AUD/JPY Tug-of-War: BOJ Rate Hike vs RBA Parliamentary Testimony
The foreign exchange market is expected to see significant movements in the AUD/JPY and NZD/JPY currency pairs next week due to two major events: the Bank of Japan's (BOJ) monetary policy meeting and parliamentary testimony from senior Reserve Bank of Australia (RBA) officials.
Markets are fully pricing in an additional 0.25% rate hike by the BOJ at its September 17-18 meeting, with yen-buying pressure continuing to cap upside across yen crosses. The RBA's Governor Bullock is scheduled to appear before parliament on September 18, and attention will be focused on whether she addresses upside inflation risks.
The Australian dollar has been under pressure due to renewed tensions in Iran, which have sent New York crude oil (WTI) futures surging above $100 per barrel. This has triggered a global equity selloff and exerted downward pressure on commodity-linked currencies such as the AUD/JPY.