AUD/JPY extended its rebound for a second session after bouncing from an eight-month low near 108.65 last Thursday. The cross held gains into the European morning, trading around 110.35 and up over 0.60% on the day. Support for the Australian Dollar followed hawkish remarks from an RBA Assistant Governor pointing to rising neutral interest rates at home and globally, while China’s third-quarter GDP grew 4.5% year-on-year, accelerating from 4.3% previously and beating expectations.
Australian Dollar Supported By Rate Outlook And Chinese Growth
Support for the Australian Dollar followed hawkish remarks from an RBA Assistant Governor pointing to rising neutral interest rates at home and globally, while China’s third-quarter GDP grew 4.5% year-on-year, accelerating from 4.3% previously and beating expectations.
Yen Pressure And BoJ Policy Expectations
The Yen remained under pressure after reports said BoJ officials see little need for back-to-back rate rises without a sharp pickup in upside inflation risks. However, BoJ Governor Kazuo Ueda said underlying inflation is approaching the 2% target, keeping the prospect of further tightening in play. Speculation that Japanese authorities could act to support the currency also constrained further JPY weakness, leaving the cross vulnerable to a capped upside. Attention now turns to the BoJ policy meeting on 29–30 October.
