AUD/JPY climbs above 93.00 on the unchanged interest rate by the RBA at 0.1%

• AUD/JPY has overstepped 93.00 on a stable interest rate policy by the RBA.
• Stagnant wage growth in the labor market has restricted the RBA to elevate policy rates.
• Soaring commodity prices have been underpinning aussie against the Japanese yen.

The AUD/JPY pair has witnessed intense buying interest from the market participants, which has pushed the cross to near 93.20 as the Reserve Bank of Australia (RBA) has maintained the status quo by keeping the borrowing rates stable at 0.1%.

The decision of untouched interest rates came on a softer labor market in Australia. RBA’s policymakers stated earlier that wage growth has not been observed in a while and the central bank has not felt any price pressure that should bolster the requirement of an interest rate hike. However, the rising inflation in accordance with Russia’s invasion of Ukraine has pinned the expectation of a rate hike later this year. It is worth noting that many central banks have elevated their interest rates along with the mighty Federal Reserve (Fed), which brought a 25 basis point (bps) interest rate hike in March. However, the RBA has yet not followed its footprints and is tackling the mammoth inflation itself.

In comparison to the Japanese yen, aussie has been outperforming amid galloping prices of food products, energy, and base metals. While, Japan, being a major importer of all these commodities has faced the heat of higher outflows and its multiplier impact on its fiscal deficit. Last week, the Bank of Japan (BOJ) followed an unlimited bond-buying program to prevent yield inversion. The move brought minor support for yen but now its effect seems to fade away.