AUD/JPY attracts some buyers above 95.00 zone after RBA announcement

• AUD/JPY hovers around the 95.05 point zone following the Reserve Bank of Australia’s (RBA) rate decision.
• The RBA decided to keep the rate unchanged at 4.1%, as expected.
• The governor of the Bank of Japan affirmed that he still has a long way to go before abandoning his ultra-loose monetary policy.
• Attention will shift to the Australian PMI ahead of the trade balance.

The AUD/JPY cross attracts some buyers and hovers around 95.15 during the Asian session on Tuesday. The pair posts modest gains following the Reserve Bank of Australia’s (RBA) monetary policy meeting. However, fear of intervention in the currency market by the Japanese authorities could limit the pair’s gains in the coming sessions.

Reserve Bank of Australia (RBA) board members decided to keep the interest rate unchanged at 4.10% at its October monetary policy meeting held on Tuesday. RBA Governor Michele Bullock stated that the central bank needed to see more data before changing the cash rate. Bullock added that the RBA was closely monitoring the inflation rate in Australia and that More rate hikes may be necessary. This, in turn, boosts the Australian Dollar (AUD) against the Japanese Yen (JPY) and acts as a tailwind for the AUD/JPY cross.

Regarding the Yen, Japanese Finance Minister Shunichi Suzuki stated on Monday that he was watching currency movements with “caution.” Additionally, Bank of Japan Governor Kazuo Ueda declared on Saturday that the BoJ had “a long way to go” before abandoning its ultra-loose monetary policy. According to the BoJ’s summary of views at the September 21-22 Monetary Policy Meeting, the BoJ said it does not need to make additional adjustments to the YCC as long-term rates are moving fairly stable and said the end of The negative rate should be linked to success in achieving 2% inflation.

Looking at the data, overall business conditions at Japan’s large manufacturing companies improved in the third quarter. Japan’s Tankan Manufacturing Index stood at 9.0 from 5.0 in the previous reading for the third quarter, above the market consensus of 6.0.

Looking ahead, market participants will be keeping an eye on the Global Composite PMI and the Australian Services PMI for September, due to be released on Wednesday. The Australian trade balance for August will be published on Thursday and the Japanese labor sector cash earnings on Friday. Traders will rely on these figures to find trading opportunities around the AUD/JPY cross.