AUD/JPY holds losses near 95.00 following hawkish BoJ Meeting Minutes

• AUD/JPY weakens as the Japanese Yen receives support from hawkish BoJ meeting minutes.
• Minutes from the BoJ’s January policy meeting suggested that most members viewed the 2% inflation target as increasingly attainable.
• The Australian Dollar remains supported as investors expect the RBA to keep interest rates unchanged in April.

AUD/JPY trades around 94.70 during early European hours on Tuesday, holding modest intraday losses after gaining over 1% in the previous session. The decline is attributed to a stronger Japanese Yen (JPY) following hawkish Bank of Japan (BoJ) Meeting Minutes, which suggested discussions on conditions for further interest rate hikes.

Minutes from the BoJ’s January policy meeting indicated that most members saw an increasing likelihood of achieving the 2% inflation target. Additionally, policymakers debated the pace at which rates should be raised further. BoJ Governor Kazuo Ueda reiterated in parliament on Monday that the central bank’s goal is to ensure stable prices and that it will adjust monetary easing accordingly if the inflation target is within reach.

Despite the current dip, the risk-sensitive AUD/JPY cross may find support from positive market sentiment, fueled by expectations of less severe US trade tariffs, progress on a Russia-Ukraine peace deal, and China’s economic stimulus measures.

The Financial Times reported that China is considering expanding a multibillion-dollar subsidy program to include services, aiming to boost consumption. This move could lift investor confidence and shift flows away from the safe-haven JPY while supporting the Australian Dollar (AUD), given the strong trade ties between Australia and China.

Additionally, Russian state media RIA Novosti reports that the US and Russia are set to release a joint statement on Tuesday following talks in Riyadh, which covered efforts to negotiate a Black Sea maritime ceasefire, among other topics.

Meanwhile, the AUD remains supported as investors anticipate the Reserve Bank of Australia (RBA) keeping interest rates steady in April. This follows its first rate cut in four years in February when the RBA signaled a more cautious stance than markets had expected. The central bank is closely monitoring US policy decisions and their potential impact on Australia’s inflation outlook.