AUD/JPY Approaches 104.50 Following Japan's Softened

AUD/JPY extended its upward trend into the third consecutive session on Tuesday, hovering around 104.50 during the European trading hours. The appreciation of the AUD/JPY pair was driven by a weaker Japanese Yen (JPY) following the release of the Bank of Japan's latest data earlier in the day. Japan's Weighted Median Inflation Index, a key indicator of inflation trends, rose by 1.1% in April, down from the 1.3% increase seen in March.

However, the Japanese Yen gained some strength in early Asian trading, supported by Japan's stronger-than-expected Corporate Service Price Index (CSPI). The CSPI reported a year-on-year growth of 2.8% in April, exceeding forecasts of 2.3% and marking its fastest pace since March 2015.

Meanwhile, Japan's Finance Minister Shun'ichi Suzuki emphasized the importance of stable currency movements aligned with economic fundamentals. Suzuki noted close monitoring of foreign exchange (FX) dynamics but refrained from commenting on whether Japan had intervened in currency markets.

On the other hand, the Australian Dollar (AUD) continued to strengthen despite softer Retail Sales data from Australia, which showed a modest 0.1% increase in April, reversing a 0.4% decline previously, yet falling short of the expected 0.2% rise.

Additionally, minutes from the latest Reserve Bank of Australia (RBA) meeting highlighted challenges in predicting future cash rate adjustments, acknowledging recent data suggesting a likelihood of inflation persisting above the targeted 2-3% range for an extended period.

Paraphrasing text from "FX Street" all rights reserved by the original author.