AUD/JPY returns to 94.00 after BOJ-led wild swings, keeps policy unchanged

• AUD/JPY is turning sideways around 94.00 after loud non-directional moves on BOJ’s stable policy.
• The BOJ has kept its ultra-loose monetary policy stance stable to spurt the growth projections.
• Aussie bulls are enjoying bids on generating higher employment than the forecasts.

The AUD/JPY pair has displayed extremely volatile moves after the announcement of the interest rate policy by the Bank of Japan (BOJ). The asset has returned back to near 94.00 and is expected to cool off its standard deviation first and will choose a direction later.

The BOJ has kept its policy stance unchanged and has dictated no change in its interest rates. A similar kind of dictation was expected from the BOJ as the central bank is dedicated to restoring its pre-pandemic growth levels. The BOJ is struggling to spurt aggregate demand in its economy and for that, the central bank is continuously flushing liquidity.

The Japanese yen has been a major underperformer in the last few months and no meaningful intervention has been recorded by the BOJ, which states that the Japanese economy is enjoying higher fund inflows from massive export numbers due to the weak yen.

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. This might be a material action from Tokyo to provide a cushion to the falling yen.

On the aussie front, significant job creation by the Australian economy is supporting the aussie bulls. The Australian labor market has added 60.6k jobs in May, more than doubled the expectations of 25k and the prior print of 4k. The jobless rate remained unchanged at 3.9% but higher than the consensus of 3.8%.