Forex Market: AUD/JPY loses ground on increased safe haven demand

Australian dollar fell from session highs against the Japanese yen on trading Tuesday, as Russian President Vladimir Putins support of Crimeas request to join the Russian Federation triggered demand for safe haven assets, such as the yen.

Having touched a daily high at 92.81 at 0:31 GMT, AUD/JPY lost 0.45% to trade at 92.06 at 9:06 GMT. Support was likely to be received at March 17th low, 91.35, while resistance was to be encountered at current session high, 92.81.

Russian President Vladimir Putin said the Russian Federation should sign an accession treaty, according to the government website, Bloomberg reported. He is expected to take a statement in front of lawmakers and regional leaders later in the day in Moscow.

European Unions foreign ministers reached an agreement to freeze assets and impose visa travel bans on 21 Russians and Crimeans, while the United States imposed similar sanctions on seven Russian government officials and four others from Ukraine.

The preliminary results from Crimea’s referendum on March 16th revealed that 96% of voters in the Black Sea peninsula supported leaving Ukraine and joining Russia.

Meanwhile, the Aussie received brief support against its major peers earlier on Tuesday, after the Reserve Bank of Australia published the minutes from its policy meeting on March 4th, where the bank decided to leave borrowing costs unchanged at the record low level of 2.50%.

“There were further signs that low interest rates were providing support to activity,” according to the minutes. “The most prudent course was likely to be a period of stability in interest rates.”

“The decline in the exchange rate seen to date would assist in achieving balanced growth in the economy, though members noted that the exchange rate remained high by historical standards,” as noted in the RBA minutes.

On Monday Westpac Banking Corp. revised its forecast for additional cuts in interest rates by the RBA during the year. Bill Evans, a chief economist at Westpac, projected a possible first increase in interest rates by the Australian central bank during the third quarter of 2015.