AUD/JPY falls below 100.50 as the likelihood of a BoJ rate hike next month revives

AUD/JPY depreciates as a Reuters survey indicated 56% of economists anticipating a BoJ rate hike in December.

Governor Kazuo Ueda indicated the possibility of further rate hikes, highlighting the Yen's impact on economic and price stability.

The Australian Dollar loses ground following the release of mixed domestic Judo Bank PMI data on Friday.

AUD/JPY continues its decline, nearing 100.30 during the Asian trading hours on Friday. This drop is likely due to a stronger Japanese Yen (JPY), following insights from a Reuters survey on expectations for the Bank of Japan (BoJ). According to the survey, 56% of economists anticipate the BoJ will raise interest rates at its December meeting, driven by the JPY’s depreciation and improving economic conditions.

Additionally, 90% of economists expect the BoJ to increase rates to 0.50% by the end of March 2025. The median forecast for the terminal rate is 1.00%, with estimates ranging from 0.50% to 2.50%. Furthermore, 96% of economists believe that a potential return of Donald Trump to the US presidency could prompt the BoJ to hike rates further, as his policies are expected to increase global inflation.

Governor Kazuo Ueda stressed the need to address the Yen's impact on economic and price stability, suggesting the possibility of further rate hikes. Additionally, Prime Minister Shigeru Ishiba’s administration is considering a $90 billion stimulus package aimed at alleviating the burden of rising prices on households.