At the policy meeting held during Tokyo hours, the Reserve Bank of Australia (RBA) decided to lower interest rates by 0.25% as expected.
In the official statement, the RBA said inflation is under control and there is less risk it will go higher. The RBA also said it will take necessary actions to keep prices stable and create full employment. This caused traders to sell the Australian dollar. The AUD/JPY rate first rose to 93.84 yen but then fell to around 93 yen. Later, RBA Governor Bullock said the rate cut was the right move and more changes are possible, which made the Australian dollar fall further to 92.54 yen. In New York trading, it recovered slightly to 92.99 yen but could not go back above 93 yen. Many traders think it is difficult for the price to go much higher now.
On the same day, Japan’s Finance Minister had a meeting with the U.S. Treasury Secretary, and they talked about currency topics. This also added pressure on the Australian dollar.
Since some people think the weak yen may soon change, it may be better to sell AUD/JPY when the price goes up for now.
Expected range for AUD/JPY: 92.00 yen – 93.00 yen
Note: This is not a guarantee of profit. Please make your own decisions when trading.