The Australian dollar traded steadily near 92.00 against the Japanese yen on Monday, as markets digested the Bank of Japan’s decision to keep interest rates unchanged amid lingering uncertainty over global trade dynamics. The currency pair remained supported by steady risk sentiment and diverging central bank outlooks.
The BoJ, as expected, left its policy rate unchanged, signaling no rush to tighten monetary settings despite recent inflation pressures. This continued divergence from other major central banks kept the yen on the defensive, with investors favoring higher-yielding currencies like the Australian dollar.
Meanwhile, the aussie found some support from stable commodity prices and hopes that China’s stimulus efforts could help sustain demand for Australian exports. However, ongoing concerns around global trade tensions—particularly related to tariffs—kept risk appetite in check, limiting the upside for AUD/JPY.
“The market is still in wait-and-see mode when it comes to trade policy,” one FX strategist noted. “But in the meantime, yield differentials are clearly supporting the Australian dollar over the yen.” The pair has managed to stay above key technical levels despite headline risks.
Japan’s cautious policy stance contrasts with growing expectations that the Reserve Bank of Australia may stay hawkish longer than peers, especially if domestic economic data continues to surprise to the upside. That divergence is expected to keep AUD/JPY well-supported in the near term.
Investors now turn to upcoming data from both economies for further direction, including Australian retail sales and Japanese inflation figures. Until there’s greater clarity on trade policy and central bank shifts, AUD/JPY is likely to remain range-bound with a slight bullish bias.
