AUD/JPY rallies above 92.50 amid buoyant commodities/equities as focus shifts to RBA meeting

• AUD/JPY rallied above 92.50 on Monday and is now over 2.0% higher versus last Thursday’s lows.
• Buoyant commodity prices and advancing equities made for a bullish mix for the pair.
• Focus now turns to the upcoming RBA meeting as markets brace for a hawkish shift.

In a strong start to the week for AUD/JPY, the pair has risen about 0.8% and was last trading to the north of the 92.50 level, roughly 2.0% higher versus last week’s lows in the 90.70 area. Commodity prices rose nearly across the board on Monday as tensions between the West and Russia amped up in wake of a growing pile of evidence of war crimes committed by Russian forces in the areas where they have now withdrawn from in northern Ukraine. Despite this, global equities remained resilient and have even seen reasonable gains during US trade, creating the perfect conditions for the Aussie to outperform.

The announces its latest monetary policy decision during the coming Asia Pacific session. If the central bank opts for a more hawkish stance regarding its guidance on interest rates hikes (i.e. signaling they could come in the coming months), that could add to AUD/JPY tailwind by highlighting the contrast between the hawkish-turning RBA versus the still ultra-dovish BoJ. AUD/JPY bulls will be eyeing a test of last week’s highs in the 94.00 area, perhaps for sometime later this week.