Weaker Australian CPI data fuels RBA rate pause expectations, while Japanese Yen strengthens on potential FX intervention.
The Australian Dollar fell 0.61% against the Japanese Yen to 113.60 after June CPI rose 3.8% YoY, below the 4% consensus and May’s 4% print. Monthly CPI declined 0.1%, marking a second straight drop.
Trimmed Mean CPI, the RBA’s preferred inflation gauge, rose 3.6% YoY, reinforcing expectations the central bank will hold rates steady. Markets have scaled back bets on further hikes this year.
The Yen gained amid speculation of Japanese authorities intervening to support the currency, though the wide Australia-Japan rate gap limits upside. Investors await Friday’s Bank of Japan decision for further direction.