AUD/JPY rebounds from 96.50 despite BoJ’s intervention chatters escalate

• AUD/JPY has attempted a decent recovery from 96.50 despite discussions about BoJ’s stealth intervention escalation.
• A poll from Reuters showed that Japanese diplomats could intervene if the Japanese Yen depreciates to 145.00 against the US Dollar.
• The decision of maintaining the status quo by the RBA could be the outcome of a decline in the monthly CPI.

The AUD/JPY pair has delivered a decent recovery after correcting to near 96.50 in the early European session. The risk barometer is fading the selling pressure despite discussions about a stealth intervention from the Bank of Japan (BoJ) or Japanese officials elevating.

Sheer depreciation in the Japanese Yen against rivals has elevated hopes of intervention. Earlier, a poll from Reuters showed that Japanese diplomats could intervene in the FX domain if the Japanese Yen depreciates to 145.00 against the US Dollar.

Japan's top financial diplomat Masato Kanda said on Tuesday that authorities were in close contact with US Treasury Secretary Janet Yellen and other overseas officials "almost every day" on currencies and broader financial markets, as reported by Reuters. The commentary from Japan’s Kanda conveys a possible currency intervention to uplift the Japanese Yen as BoJ Governor Kazuo Ueda has not shown signs of an exit from its decade-long ultra-loose monetary policy.

Meanwhile, a survey conducted by Rengo showed that average pay has been hiked by 3.58%, which has been recorded as the biggest hike since 1993. This assures that inflation in Japan would become demand-driven rather than banking upon the higher cost of imported products.

On the Australian Dollar front, the Reserve Bank of Australia (RBA) announced a steady interest rate decision this week. RBA Governor Philip Lowe would get some time to assess the impact of interest rate hikes yet made. The decision of maintaining the status quo could be the outcome of a decline in the monthly Consumer Price Index (CPI). Monthly inflation has softened to 5.6% in May from the former release of 6.8%