- AUD/JPY gains traction to near 96.55 in Tuesday’s Asian session.
- The RBA cut its OCR by 25 bps to 4.10% at the February meeting.
- Rising expectations for further BoJ rate rise might help limit the JPY’s losses.
The AUD/JPY cross attracts some buyers to around 96.55 during the early Asian session on Tuesday. The Australian Dollar (AUD) edges higher after the Reserve Bank of Australia (RBA) interest rate decision.
As widely expected, the RBA board members decided to lower the Official Cash Rate (OCR) by 25 basis points (bps) from 4.35% to 4.10% at its February policy meeting on Tuesday. This marks the first rate cut in four years. In the absence of fresh dovish remarks, the Aussie strengthens against the Japanese Yen (JPY).
Additionally, US President Donald Trump’s decision to delay the implementation of reciprocal tariffs contributes to the AUD’s upside. The process of Trump’s ultimate tariff policies might take longer than many analysts had expected. Westpac analysts are leaning toward further gains in the AUD in the near term.
On the JPY’s front, the rising bets for more interest rate hikes by the Bank of Japan (BoJ) could lift the Japanese Yen (JPY) and create a headwind for AUD/JPY. Former BoJ official Nobuyasu Atago sees the chance of a hike at the April 30-May 1 meeting, given the BOJ’s rising attention to the risk of an inflation overshoot.
