AUD/JPY turns sideways below 94.00 ahead of RBA Lowe’s speech

• AUD/JPY is oscillating in a narrow range below 94.00 as investors are awaiting a speech from RBA’s Lowe.
• Mixed responses from the risk profile are also keeping the risk-sensitive assets on the sidelines.
• Japanese administration has announced fresh stimulus to support economic prospects.

The AUD/JPY pair is displaying a sideways performance in the early Asian session as investors are awaiting a speech from Reserve Bank of Australia (RBA) Governor Philip Lowe for making an informed decision. Mixed responses from the risk profile are also keeping the risk-sensitive assets on the sidelines.

The speech from RBA Governor will guide the likely monetary policy action ahead. Inflation pressures are displaying a historic surge led by significant price growth from service providers. The RBA is continuously hiking its Official Cash Rate (OCR) in each monetary policy.

Recently, the Australian central bank trimmed its rate hike pace to 25 basis points (bps). In response to that, RBA policymakers cited that interest rates have already been increased significantly and consideration of monetary policies on monthly intervals provides an edge to go parallel with the pace of other central banks in no time.

Apart from the interest rate guidance, investors will also focus on remarks about declining real estate prices. Rising interest obligations have compelled home buyers to postpone their demand, which is resulting in a vulnerable housing market.

On Monday, the risk barometer remained solid despite an unchanged monetary policy by the People’s Bank of China (PBOC). The PBOC kept its Prime Lending Rates (PLRs) stable, knowing the fact that Covid-19 infections are galloping and the real estate sector is extremely vulnerable. Investors should be aware of the fact that Australia is one of the leading trading partners of China and PBOC’s monetary policy stance has a significant impact on Aussie dollar.

On the Tokyo front, an announcement of fresh stimulus to support growth prospects could impact the Japanese yen.  Japanese Finance Minister Shunichi Suzuki said in a statement on Monday, his government will guide economic and fiscal policy in a "responsible" manner. He urged a swift adoption of more spending measures, worth $207 billion, backed mostly by new debt issuance.