The AUD/JPY currency pair held within a tight daily range on Monday, as traders awaited the release of the Reserve Bank of Australia minutes from its June monetary policy meeting.
In that decision, the RBA maintained its official cash rate at 4.35% after raising rates at three consecutive prior meetings.
The minutes will provide a more detailed account of the RBA Board’s assessment of domestic and global economic conditions as well as the internal debate that led to the decision to hold rates steady.
At the same time, concerns over a possible foreign-exchange intervention by Japanese authorities remain elevated as the Yen trades near historically sensitive levels.
Japan’s Chief Cabinet Secretary Minoru Kihara reiterated last week that authorities stood ready to respond to excessive moves in the currency market, signaling a willingness to “take appropriate action” if deemed necessary.
The policy stance of the Bank of Japan continues to be a major driver for the Yen. BoJ board member Naoki Tamura, regarded as hawkish, stated last week that the central bank should raise interest rates once every few months and be prepared to accelerate the pace of tightening. He underscored the BoJ’s attention to inflation risks that may arise from the Middle East conflict.
The BoJ’s next monetary policy meeting is scheduled for July 30-31.
A Reuters poll conducted before the June hike indicated that most economists anticipated a rate increase to 1.25% in the fourth quarter, highlighting expectations of a gradual normalization path.
The AUD/JPY currency pair was last up 0.04% on the day to trade at 111.561.
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