AUD Surges Against JPY as BoJ Rate Hike Disappoints Hawks

The Australian Dollar (AUD) surged against the Japanese Yen (JPY) on Friday, reaching an intraday high of around 112.60 after a Bank of Japan (BoJ) rate hike that failed to meet hawkish expectations.

The BoJ raised its policy rate by 25 basis points to 1.25%, its highest level since 1995, but the decision was largely priced in by investors.

According to TMGM analysis, the Japanese Yen's reaction may seem counterintuitive following the rate hike, but investors are focusing on communication that is not hawkish enough to justify expectations of more aggressive monetary tightening.