AUD/JPY falls below 90.50 as odds of BoJ rate hike rise
The Bank of Japan's Ueda said further rate hikes remained on the table if inflation trends were in line with the bank's forecasts.
The People's Bank of China chose to keep its LPR unchanged, keeping the one-year and five-year rates at 3.10 percent and 3.60 percent, respectively.
AUD/JPY extended its losses for the second consecutive trading day, hovering near the 90.40 during Monday's European trading session. The yen (JPY) continues to strengthen, helped by rising expectations that the Bank of Japan (BoJ) will stick to a rate hike.
Bank of Japan Governor Kazuo Ueda recently said that real interest rates in Japan are still low and said that if economic and price conditions evolve as expected, the Bank of Japan may continue to raise interest rates. His sentiment was echoed by BoJ board member Junko Nagakawa, reinforcing market expectations of further tightening.
Meanwhile, risk sentiment remains fragile due to concerns over US President Donald Trump's volatile stance on tariffs. The latest move by the White House to impose tariffs on Chinese ships docking at U.S. ports has raised concerns about global shipping disruptions, boosting demand for traditional safe-haven assets such as the yen.
However, losses from the AUD/JPY crossover are likely to be limited after the People's Bank of China (PBoC) decided to maintain its lending key rate, keeping the one-year rate at 3.10 per cent and the five-year rate at 3.60 per cent.
The Australian dollar was also strong on concerns about the broader economic impact of U.S. tariffs. In addition, sentiment improved after Trump announced exemptions for key technology products, many of which are made in China, Australia's largest trading partner and a major buyer of its commodity exports.
