Australian Dollar holds losses against Japanese Yen following BoJ rate decision
AUD/JPY loses ground for the second consecutive day, trading around 110.80 during Asian hours on Friday.
The Australian Dollar experienced a decline, trading around 110.80 against the Japanese Yen, marking the second day of losses. This downward trend occurred as the Japanese Yen remained stronger following the Bank of Japan's decision to maintain the short-term interest rate at 1.25%. Australian Dollar support emerged from forecasts of additional policy tightening by the Reserve Bank of Australia, with hotter-than-expected inflation data and hawkish remarks from RBA officials increasing expectations of a rate hike in November.
The ASX 30-day interbank cash rate futures for November 2026 were trading at 95.22, indicating an 80% likelihood of a rate increase to 4.85%. The stronger-than-anticipated third-quarter CPI print reinforced the RBA's anticipated rate hike, with the bank predicting a 25 basis point increase to 4.85% at the upcoming meeting. The Bank of Japan held its interest rate decision during its annual meetings, raising rates if the economy displayed hawkish inflationary tendencies, or keeping or lowering them if the outlook was dovish.
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