AUD/JPY remains steady around 97.00 despite rising hawkish tone surrounding BoJ outlook

• AUD/JPY holds ground as Australia’s Consumer Inflation Expectations rose to 4.6% in February from 4.0% prior.
• Market caution increased as the White House indicated that President Trump could unveil his reciprocal tariff plan on Thursday.
• Japan's PPI rose 4.2% YoY in January, marking the highest reading since May 2023.

AUD/JPY remains steady after registering gains in the previous three sessions, trading around 97.00 during Asian hours on Thursday. The Australian Dollar (AUD) strengthened against its counterparts following an increase in Australia’s Consumer Inflation Expectations, which rose to 4.6% in February from January’s 4.0%

However, the upside for the AUD/JPY cross may be capped due to mounting concerns over a potential global trade war. Late Wednesday, the White House indicated that US President Donald Trump could unveil his reciprocal tariff plan before meeting Indian Prime Minister Narendra Modi on Thursday, according to CNBC. Trump has recently signaled his intention to impose tariffs on all nations that levy import duties on the United States (US).

Additionally, the Japanese Yen (JPY) gains support following the release of stronger-than-expected Producer Price Index (PPI) data from Japan, reinforcing expectations of further rate hikes by the Bank of Japan (BoJ).

Japan's PPI rose 4.2% year-over-year in January 2025, accelerating from an upwardly revised 3.9% in the previous month and surpassing market expectations of 4.0%. This marks the 47th consecutive month of producer inflation and the highest reading since May 2023. On a monthly basis, producer prices increased by 0.3%, aligning with estimates but easing slightly from December’s 0.4% growth. The data highlights expanding inflationary pressures in Japan, further supported by recent wage growth figures, strengthening the case for additional BoJ rate hikes.