AUD/JPY Weakens Amid Warning of Potential Intervention
The AUD/JPY cross is trading in negative territory around 112.55 during early European trading hours on Friday, as the Japanese Yen strengthens against the Australian Dollar.
A warning of potential intervention from Japanese authorities has kept traders on high alert, with former top currency diplomat Mitsuhiro Furusawa suggesting that Tokyo may conduct joint JPY intervention with the United States 'at any time'. This is in addition to signaling the chance of faster-than-expected interest rate hikes to arrest the currency's slide.
The markets currently see a 76% chance of the Bank of Japan (BoJ) rate hike in September, according to Tokyo Tanshi data, compared with 24% on July 30. This comes after Japan's second FX market intervention this year, which was conducted in coordination with the US.