The AUD/JPY pair maintained its upward momentum on Wednesday, advancing toward the 94.50 level during Asian trading hours, as investor skepticism grows over whether the Bank of Japan (BoJ) will pursue another rate hike this year.
Japan’s Prime Minister Shigeru Ishiba voiced concerns on Monday about the potential negative impact of rising BoJ interest rates on Tokyo’s spending plans. His remarks come amid heightened economic uncertainty linked to the fallout from US President Donald Trump’s tariff policies.
Supporting this cautious outlook, a Reuters poll conducted between June 2 and 10 revealed that a slight majority of economists expect the BoJ to keep interest rates steady at 0.50% through year-end. None of the 60 economists surveyed anticipated a rate increase at the BoJ’s next monetary policy meeting scheduled for June 16-17. Meanwhile, BoJ Governor Kazuo Ueda has signaled openness to further tightening if inflation moves convincingly toward the 2% target.
Against this backdrop, the Australian Dollar showed modest performance despite recent progress in US-China trade relations. Washington and Beijing agreed on a framework to implement the Geneva trade deal reached last month, although the plan still requires approval from US President Donald Trump and Chinese leader Xi Jinping.
The positive outlook from the two-day US-China trade talks bolsters the Australian Dollar, given Australia’s heavy economic reliance on exports to China. This dynamic supports AUD/JPY gains as markets weigh evolving monetary policy expectations in Japan against improving trade sentiment.
