The Australian Dollar recovers against the Yen as China’s rate cut supports AUD, widening the RBA-BoJ interest rate gap.
The AUD/JPY pair climbed to 113.60 in European trading, reversing two days of losses. The rebound follows the People’s Bank of China’s interest rate decision, which bolstered the Australian Dollar amid a widening policy gap with the Bank of Japan.
Prior to the move, the cross had retreated from recent highs, with traders monitoring central bank divergence. The RBA’s relatively hawkish stance contrasts with the BoJ’s ultra-loose policy, supporting AUD strength against JPY.
Market focus remains on monetary policy differentials as traders assess the impact of China’s easing on regional currencies.