Yen Weakens on Soft Inflation Data as Aussie Firms on RBA Hike Bets
The Japanese yen has weakened modestly against its US counterpart as investors reevaluate the Bank of Japan's (BoJ) hawkish stance following softer-than-expected inflation data for August.
The data, which showed headline CPI at 1.9% year-on-year, down from July's reading and below forecasts of 2.0%, has traders questioning whether the BoJ will sound as hawkish in its outlook today despite a widely expected rate hike.
The Australian dollar, on the other hand, has firmed up on comments from Reserve Bank of Australia (RBA) Governor Michele Bullock that upside inflation risks flagged in August are now materializing, driven by Middle East oil prices, the AI boom, and extreme weather events.
Bullock's remarks have been interpreted as a strong signal for another RBA rate hike at the September 28-29 meeting, adding support to the Australian dollar through the session.