Coordinated US-Japan intervention to support the JPY triggers short-covering, pressuring the AUD/JPY cross below 110.00.
The AUD/JPY cross declined for a fifth consecutive day, dropping to its lowest level since early April near the 110.00 mark, down over 0.50% on the session. The move follows confirmation of a rare joint US-Japan foreign exchange intervention on Friday to curb the JPY’s decline, prompting aggressive short-covering in the currency.
Japan’s Finance Minister confirmed the intervention, while US Treasury Secretary indicated readiness for further coordinated action if disorderly JPY moves persist. The Bank of Japan’s hawkish stance, signaling potential rate hikes, added support to the JPY. Meanwhile, the AUD faces headwinds from waning expectations of an immediate RBA rate hike and weak China manufacturing data.
Spot prices remain under pressure, with traders monitoring further intervention risks and RBA policy signals.