AUD Surges Against JPY as RBA Hike Odds Soar to 32%

The Australian Dollar (AUD) has surged against the Japanese Yen (JPY), reaching near 114.30 as market participants expect an interest rate hike from the Reserve Bank of Australia (RBA).

This move comes after the release of hotter-than-expected Australian Consumer Price Index (CPI) data for July, which showed a headline CPI rise of +3.5% year-over-year in July.

Analysts at Deutsche Bank noted that this upside surprise has had a swift impact on policy expectations, with traders increasing pricing of an RBA rate hike at the September 28-29 meeting from 10% to 32%.