BoJ Hike Sends AUD/JPY Reeling Amid Central Bank Divergence

The AUD/JPY cross is holding below 112.00 as the market digests the Bank of Japan's recent rate hike and diverging central bank policies.

Last week, the BoJ increased its policy rate by 25 basis points to 1.25%, but the decision was not unanimous, with a 7-2 vote against further tightening.

This move has weighed on the Japanese Yen (JPY) and led to selling interest in the AUD/JPY cross, which is currently trading around 111.95.

The Reserve Bank of Australia (RBA), however, appears likely to increase its key interest rate at the upcoming September 28-29 policy meeting, with Bloomberg Economics assigning a 90% probability to this outcome.