AUD/JPY extends gains to near 97.50 due to RBA’s hawkish stance

• AUD/JPY receives support as traders expect the RBA to hold a hawkish stance regarding its policy outlook.
• Australia's Westpac Consumer Confidence increased by 2.8% in August, reversing the 1.1% decline observed in July.
• Japan's parliament will hold a special session to discuss the BoJ’s last interest rate hike.

AUD/JPY advances further for the second successive day, trading around 97.60 during the European hours on Tuesday. The AUD/JPY cross received support from the hawkish sentiment surrounding the Reserve Bank of Australia (RBA).

On Monday, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser attributed persistent inflation to weaker supply and a tight labor market. Hauser also noted that economic forecasts are surrounded by significant uncertainty.

On the data front, Australia's Westpac Consumer Confidence rose by 2.8% in August, swinging from a 1.1% fall in July. Meanwhile, the Wage Price Index remained steady with a 0.8% rise in the second quarter, slightly below the market expectation of a 0.9% increase.

The upside of the risk-sensitive Aussie Dollar could be restrained due to rising geopolitical tensions in the Middle East. Safe-haven flows might have contributed support for the Japanese Yen (JPY), limiting the upside of the AUD/JPY cross.

Israeli forces pressed on with their operations near the southern Gaza city of Khan Younis on Monday. CBC News cited Palestinian medics saying Israeli military strikes on Khan Younis on Monday killed at least 18 people.

Japan's parliament is set to hold a special session on August 23 to discuss the Bank of Japan's (BoJ) decision to raise interest rates last month. The session, organized by the lower house financial affairs committee, is expected to invite BoJ Governor Kazuo Ueda, according to government sources cited by Reuters.