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AUD/JPY jumps above 73.00 after RBA maintains status quo

  • AUD/JPY has added more than 40 pips post-RBA. 
  • The central bank kept rates unchanged as expected. 
  • RBA downplayed fears of a significant slowdown due to coronavirus and bushfires.

The bid tone around the Aussie dollar strengthened, pushing the AUD/JPY pair higher from 72.65 to 73.10 after the Reserve Bank of Australia (RBA) kept rates unchanged at a record low of 0.75%, as expected. 

The central bank said the consumption growth is expected to pick up gradually and the central scenario for the Australian economy is to grow by 2.75% in 2020 and 3% in 2021. Meanwhile, inflation is forecasted to remain close to 2% in 2020 and 2021.

The bank also took note of signs of a turnaround in the housing market, especially in Sydney and Melbourne and said the bushfires and coronavirus scare will temporarily weigh on growth. The markets were expecting the RBA to mention coronavirus and bushfires as significant downside risks to the economy. 

The AUD, therefore, has picked up a bid and could continue to gain altitude during the day ahead as equity markets are also flashing green, signaling continued risk reset. At press time, the futures on the S&P 50 are reporting a 0.57% gain. 

Technical levels

 

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