May CPI figures and Bank of Japan policy decisions drive currency moves amid sticky inflation and rate hike signals.
Australian inflation data for May showed underlying price pressures remaining sticky despite a fuel-driven drag, pushing the AUD 60 points lower. The report highlighted persistent inflation risks, countering expectations of a near-term policy shift by the Reserve Bank of Australia.
The Bank of Japan raised its policy rate to 1% at its June meeting, pausing bond taper plans until April 2027 and flagging inflation overshoot risks. Deputy Governor Uchida indicated further hikes if conditions align, though the yen remained weak post-announcement.
The BoJ’s Summary of Opinions, released roughly two weeks after the meeting, outlined board members’ views anonymously, revealing dissent and key conditions for future policy moves. Markets reacted cautiously, with limited immediate impact on JPY volatility.