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The AUD/JPY cross has surged to a new all-time high above 113.50, driven by growing expectations of a rate hike by Australia’s central bank (RBA) and continued weakness in the Japanese yen (JPY). The pair has gained 0.90% in a single session, extending its four-day winning streak as traders bet on tighter monetary policy in Australia and dovish inaction from Japan’s Bank of Japan (BOJ). The RBA’s potential rate increase contrasts with the BOJ’s prolonged ultra-loose stance, creating a favorable environment for the AUD/JPY cross. This upward momentum is significant for forex traders, as the AUD/JPY cross is highly sensitive to interest rate differentials between Australia and Japan. A stronger AUD and weaker JPY signal divergent central bank policies, with the RBA likely to follow the Fed’s tightening cycle while the BOJ remains accommodative. Traders are closely monitoring RBA Governor Michele Bullock’s upcoming policy statements for further clues on rate hike timing. For global markets, the AUD/JPY rally highlights the importance of central bank policy divergence in shaping currency pairs. Investors should watch key resistance levels around 114.00 and 115.00, as a breakout could signal sustained momentum. Additionally, any shift in BOJ policy or RBA guidance could trigger volatility in the cross.
