The AUD/JPY currency pair hovered above a fresh 2-week low of 112.06 on Tuesday, as the Japanese Yen held firm, supported by persistent concerns that Japanese authorities may step into the foreign exchange market.
On Monday, Finance Minister Satsuki Katayama said that officials were prepared to respond appropriately to currency fluctuations at any time. Those remarks were reinforced on Tuesday when Chief Cabinet Secretary Minoru Kihara reiterated that the government would take decisive action against volatile foreign exchange moves if necessary.
Recent inflation data added another layer of support to the Yen. Fresh figures from the Bank of Japan on Tuesday indicated that underlying price pressures remained elevated. The BoJ’s new core consumer inflation measure rose 2.7% in May, while the core-core CPI increased 2.1%. Both measures eased slightly from April readings of 2.8% and 2.2%, but stayed above the central bank’s 2% target.
On the Australian side, expectations of a relatively hawkish stance from the Reserve Bank of Australia may help underpin the AUD. The RBA kept its official cash rate unchanged at 4.35% at its June monetary policy meeting.
Reserve Bank of Australia Governor Michele Bullock reiterated that inflation had remained elevated and cautioned that additional rate hikes could not be entirely dismissed.
The AUD/JPY currency pair was last down 0.73% on the day to trade at 112.26.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
