AUD/JPY Holds Steady Above 104.00 After RBA Decision

The AUD/JPY cross sees some selling pressure following an uptick during the Asian session on Tuesday, halting the overnight recovery from the 103.60-103.55 region, which marked a multi-day low. Currently, the spot price hovers just above the 104.00 round figure, remaining under pressure after the Reserve Bank of Australia (RBA) released its policy decision.

As widely expected, the RBA maintained the Official Cash Rate (OCR) at a 12-year high of 4.35% for the fifth consecutive meeting in June, while retaining a hawkish stance. The central bank is likely to leave the possibility of a rate hike open for this year due to persistent inflation, potentially supporting the Australian Dollar (AUD) and the AUD/JPY cross.

Data released from China on Monday indicated a challenging recovery for the world's second-largest economy, overshadowing the RBA's narrative of prolonged high interest rates and weakening antipodean currencies, including the AUD. Concurrently, the Japanese Yen (JPY) benefits from comments by Bank of Japan (BoJ) Governor Kazuo Ueda, who suggested that the central bank might raise rates in July depending on economic data.

Additionally, speculations about potential intervention by Japanese authorities to bolster the domestic currency contribute to the AUD/JPY pair's decline. However, a generally positive risk sentiment, which typically reduces demand for the safe-haven JPY and supports the risk-sensitive AUD, should help prevent a significant drop ahead of RBA Governor Michele Bullock’s press conference at 05:30 GMT.

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