AUD/JPY juggles in an 88.10-88.34 range as focus shifts to RBA meeting minutes

• AUD/JPY has experienced a responsive buying action after the release of the Consumer Inflation Expectations.
• The improved safe-haven appeal underpinned yen against aussie over the past few trading sessions.
• Investors will focus on the release of the RBA meeting minutes next week.

The AUD/JPY pair has witnessed a rebound after hitting a low of 87.48 in the New York session. The risk barometer has remained in the grip of bears for the past few trading sessions amid improvement in the safe-haven appeal. Risk-sensitive assets were facing the headwinds of higher inflation and the Ukraine crisis, which led to a steep fall in the risk-perceived assets.

The asset has found a cushion after the Melbourne Institute reported the Consumer Inflation Expectations at 5%, mid of the market consensus and former print of 4.85 and 5.2% respectively. This has bolstered the odds of one more rate hike by the Reserve Bank of Australia (RBA) in its June policy.

The RBA stepped up its interest rates by 35 basis points (bps) in May’s first week to tame the galloping inflation. This was the first time when RBA raised its interest rates after the emergence of the Covid-19. Mounting price pressures were affecting the paycheck of the households, which forced the RBA to bank upon strict quantitative measures.

On the Japanese front, a safe-haven appeal has brought a broader strength in yen. Although the Bank of Japan (BOJ) will keep on pouring funds into its economy to spurt the growth rate so yen could lose strength further.

Going forward, investors will keep an eye on the release of the RBA’s meeting minutes on Tuesday. This will provide the strategic planning and buildup of the RBA policymakers behind elevating the interest rates.