Australia’s July CPI rose 3.5% YoY, exceeding expectations and bolstering the Australian Dollar against the Yen.
The AUD/JPY pair climbed to 114.20 in Asian trading, extending gains after Australia’s July Consumer Price Index (CPI) rose 3.5% year-over-year, above the 3.2% forecast. The monthly CPI also surged 1.0%, reversing a 0.1% decline in June and surpassing the 0.8% estimate.
Prior to the release, markets anticipated a 3.8% YoY increase in June, while the Trimmed Mean CPI advanced 3.6% annually. The stronger-than-expected inflation data contrasts with Japan’s expansionary fiscal policy and high debt, which continue to weigh on the Yen.
Investors are now eyeing the Bank of Japan’s tone beyond its September meeting, with expectations of further tightening potentially limiting the Yen’s losses.