- AUD/JPY lost part of its initial gains in the pre-European session.
- AUD loses track post RBA rate decision.
- Yen mostly gains on its safe-haven appeal.
The AUD/JPY price erases earlier gains in an immediate reaction to RBA's status-quo on its monetary policy. The pair sharply fell from the highs near the 85 level comprising a 20-pip movement to touch the intraday low at 84.71.
At the time of writing, AUD/JPY is trading at 84.81, up 0.07% for the day.
As widely expected, the Reserve Bank of Australia kept its cash rate at a record low of 0.1% in its June meeting. The central bank did not offer any surprise for the market. However, the policymakers reaffirmed their commitment to stick with highly accommodative conditions until at least 2024. This, in turn, affects AUD negatively.
The central bank insisted that the future course of monetary policy would be based on the actual inflation when it is within the 2% to 3% target.
The policymakers' tone was slightly positive on the labor market conditions citing improved employment situation with the unemployment rate declined to 5.5% in April.
The ongoing Victoria lockdown is not directly addressed by the central bank but referred to as a case of uncertainty that should be diminished as more population gets vaccinated.
On the other hand, the yen remained on the backfoot after the Organisation for Economic Cooperation and Development (OECD) cut the economic outlook after the Japanese policymakers had shown similar concerns on the economic recovery.