Aud/JPY maintains a position near 94.00, the risk of the negative side appears due to Hawkish Boj

• Aud/JPY may weaken the Japanese yen finding support from the policy expectations of the hawks at the Bank of Japan.
• The Australian dollar is declining after disappointing private capital expenses on Thursday.
• Vice Governor RBA Andrew Hoser highlighted that the narrow labor market in Australia is still a challenge to inflation management.

Aud/JPY holds gains after two consecutive sessions of losses, and traded near 94.00 during the early European hours on Thursday. However, the currency faced by pressing the negative side as the Japanese yen gained support from strong expectations that the Bank of Japan will continue to raise interest rates this year, driven by upward surprises in inflation in the fourth quarter and the growth of strong wages.

Market participants in Japan are waiting for many major economic reports due on Friday. These reports, which include industrial production, retail sales, and Tokyo enlargement, are expected to provide decisive visions in the direction of future monetary policy.

The Aud/JPY CROSS team could have faced opposite winds after the Australian disappointing capitalist spending data was filmed on Thursday, which showed an unexpected contraction of 0.2 % on a quarter of a quarter in the fourth quarter of 2024, and the loss of market expectations by 0.8 %. This follows a 1.6 % revised expansion in the previous quarter.

On Thursday, Australian Deputy Governor of the Australian Reserve Bank (RBA) expressed his optimism about inflation trends, but stressed the importance of seeing continuous progress. He also pointed out that the narrow labor market in Australia is still a challenge to control inflation.

In addition, the Wall Street Journal report on the future of the Australian dollar, noting the Commonwealth Bank of Australia (CBA), the increasing concerns about the risks of the potential trade war that Trump moves. China’s response to these threats will be a major factor that affects the future performance of AUD.