AUD/JPY rebounds firmly from 93.00 on expectations of ultra-loose BOJ policy

• AUD/JPY has recovered its intraday losses and is advancing to recapture the day’s high at 93.54.
• The BOJ is expected to keep flushing liquidity into its economy.
• Higher price pressures in Japan are majorly contributed by costly fossil fuels.

The AUD/JPY pair has rebounded strongly after plunging to near 93.00 in the early Tokyo session. The risk barometer has been in the grip of bulls, which can be confirmed with a firmer rally from 91.97 recorded on Thursday. Giant wild moves are expected from the risk barometer in today’s session as investors are awaiting the announcement of the interest rate decision by the Bank of Japan.

Maintenance of an ultra-loose monetary policy is expected from the BOJ amid lower demand in the economy. The BOJ is keep flushing liquidity into the economy to spurt the aggregate demand. Also, the BOJ remained worried about lower price pressures.

It is worth noting that the Japanese economy has accomplished its tricky task of elevating the inflation rate above 2%. The annual inflation rate has crossed 2% in the Japanese economy backed by advancing oil prices. Costly fossil fuels have worsened the situation for the BOJ. On one side, the unavailability of all-around improvement in aggregate demand is making the job more difficult for the BOJ while on the other side, higher oil prices are eating the paychecks of the household.

Meanwhile, Japan's Finance Minister has reappointed Japan's Vice Finance Minister Masato Kanda for international affairs as a top currency diplomat in the mid-year personnel reshuffle.

On the aussie front, higher employment generation by the Australian economy has supported the antipodean. The Australian economy has added 60.6k jobs in May, much higher than the expectations of 25k and the prior print of 4k. However, the Unemployment Rate remained unchanged at 3.9% but higher than the consensus of 3.8%.