AUD/JPY eases below 85.50 ahead of BOJ decision, Japan Retail Sales disappoint

• AUD/JPY posts losses for the second straight day on Thursday.
• Traders look up to RBA Deputy Governor Debelle speech on inflation.
• BOJ interest rate decision and Retail sales data will be in focus.

AUD/JPY surrenders gain in the early Asian session on Thursday. The pair touched the highs of 0.8600 post upbeat Australia’s inflation data in the previous session,but failed to preserve the momentum. As of writing, the AUD/JPY is trading at 85.40, down 0.15% for the day.

The aussie remained cautious ahead of the remarks from the Reserve Bank of Australia (RBA) Deputy Governor Debelle on inflation. Earlier gains for the pair evaporated after the Australia's headlines Consumer Price Index (CPA) came in line with market expectations of 0.8% QoQ basis for the September quarter (Q3) while the YoY figures dropped below 3.8% as compared to previous one to 3.0% below the market projections of 3.1%. The RBA Trimmed Mean CPI came at 2.1% versus 1.8% expected. 

On the other hand, the Japanese yen lost its momentum amid an improved risk appetite among investors. It is worth noting that S&P 500 Futures are trading at 4,552.50, up 0.18% for the day. Further, the market is bracing for the Bank of Japan (BOJ) dovish monetary policy announcement on Thursday. The BoJ is expected to maintain its target for short-term interest rates at -0.1% and that for 10-year bond yields near 0%.

The Japan's Retail Sales declined 0.60% in September.

As for now, traders turn their attention to Japan’s Retail Sales data, and BOJ Interest Rate Decision to gauge the market sentiment

AUD/JPY additional levels