AUD/JPY holds positive ground near 92.00 as BoJ keeps rate steady amid tariff uncertainty
- AUD/JPY's strength gathers strength around 91.90 at the Asian session of Thursday.
- The BOJ maintains interest rates that are stable at its May meeting, as is widely expected.
- Australia's excessive trade rose to 6,900m moms in March, estimating the estimate.
The AUD/JPY Cross gets traction near 91.90 at the time of Asian trading on Thursday. The Japanese Yen (JPY) is trading slightly vulnerable to Aussie after the Bank of Japan (BOJ) decided to keep its policy rate unchanged on Thursday. The attention will move to the BOJ press conference later on Thursday.
Members of the BoJ board decided to leave the target interest rate that would not change the range of 0.40% -0.50% on Thursday, as widely expected. The Japanese Central Bank noted in a statement that the economy is likely to slow down as the impact of the trade policy slows down global growth.
The BOJ noted that it is important to carefully monitor factors such as economic activity development, and the central bank will continue to raise the policy rate if the economy and prices move in its line. Market players will monitor BoJ Governor Kazuo Ueda's press conference, which may offer some clues about the interest rate path in Japan.
In front of Aussie, Australia's Australian trading balance data increases can boost the AUD against JPY. Excessive trade in the country rose to 6,900m moms in March, compared to 3,130m and the previous reading of 2,852m (modified from 2,968m), the Australian Bureau of Statistics reported Thursday. Strong excess is driven by a 7.6% increase in exports and a collapse of 2.2% in imports for the month.
Bank of Japan FAQs
The Bank of Japan (BOJ) is the Japanese Central Bank, which sets the country's financial policy. Its mandate is to issue banknotes and make money and financial control to ensure price stability, which means an inflation target of almost 2%.
The Bank of Japan began an ultra-loose financial policy in 2013 to stimulate the economy and inflation of fuel amid a low-inflationary environment. Bank policy is based on quantity and excellent (QQE), or printing notes to buy properties such as government or corporate bond to provide liquidity. In 2016, the bank doubled its approach and further policy loosening through the first introduction of negative interest rates and then directly controlled the yield of the 10-year government bond. In March 2024, the BOJ raised interest rates, effectively withdrawing from ultra-loose financial policy policy.
The bank's massive stimulation caused the yen to remove the main peers. This process was exacerbated in 2022 and 2023 due to an increasing policy variation between the Bank of Japan and other major central banks, which decided to increase interest rates to combat decades of high levels of inflation. The BOJ's policy led to an expansion of the difference -different from other currencies, which dragged the amount of yen. This trend was slightly reversed in 2024, when the BOJ decided to abandon its ultra-loose policy.
A weak yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeds the target of 2% of the BOJ. The rising salaries in the country -a major fuel element that burns -also contributes to the move.
