AUD Rally vs JPY as Aussie Inflation Surprises to the Upside

The Australian Dollar (AUD) strengthened against the Japanese Yen (JPY) for a second consecutive day, reaching around 114.20 during Asian hours on Wednesday.

This uptrend was driven by Australia's Consumer Price Index (CPI) exceeding market expectations, rising 3.5% year-over-year in July, compared to a forecast of 3.2%. This upside surprise bolstered demand for the AUD against the JPY.

Market participants are increasingly focused on the Bank of Japan's policy tone beyond its September 18 meeting, with tightening expectations building. Strategists at Scotiabank highlight that attention is shifting past the immediate outcome of the BoJ decision and toward the central bank's subsequent communication for guidance on the policy path.