On Tuesday, the AUD/JPY strengthened its gains from the previous week.
The Australian dollar rose across the board after the Reserve Bank of Australia kept interest rates unchanged.
Rising corona infections and the prolonging of the lockdown ahead of the summer Olympics continue to put pressure on the yen.
In early European trading hours on Tuesday, the AUD/JPY maintains its earlier gains. Following the Reserve Bank of Australia (RBA) interest rate decision, the pair reached an intraday high in the area of 84.0 and managed to maintain the upward momentum.
The AUD/JPY currency pair is currently trading at 83.79, up 0.30 percent on the day.
In its July monetary policy meeting, the Reserve Bank of Australia (RBA) left its official cash rate (OCR) steady at a record low of 0.10 percent. The market has already discounted the RBA’s decision, and no fresh information is expected to be presented at the meeting. The only important point is that the RBA intends to continue purchasing bonds beyond September’s deadline.
Furthermore, the ongoing tensions between China and Australia have erupted again when Beijing accused its counterpart of sabotaging the COVID-19 vaccination in Asia-Pacific, putting pressure on Australia.
In terms of the economy, the Australian AiG Construction PMI fell to 55.5 in June from 58.3 the month before. In June, retail sales increased by 0.4 percent, compared to 1.1 percent gain the previous month.
The yen, on the other hand, rose on its safe-haven appeal as a result of increased coronavirus infection worldwide due to the Delta strain, which is jeopardizing the economy’s recovery speed.
The Japanese government is planning to extend its quasi-state of emergence in Tokyo during the Summer Olympics, according to the latest news. The currency gains were restrained due to a delayed vaccination rollout and a lockout restriction.
Following the negative economic reports, attitude deteriorated even more. Household spending in Japan increased by 11.6 percent in May, slowing from a 13 percent increase the previous month.
For the time being, market forces continue to have an impact on the pair’s performance./n
