AUD/JPY attracts some sellers to near 97.00 as BoJ maintains rates steady

• AUD/JPY weakens around 97.05 in Friday’s Asian session, down 0.22% on the day. 
• The BoJ kept the interest rate unchanged in September, as widely expected. 
• CBA analysts expect the RBA to cut its Official Cash Rate (OCR) in December.

The AUD/JPY cross loses ground around 97.05, snapping the four-day winning streak during the Asian trading hours on Friday. The cross drifts lower after the Bank of Japan (BoJ) announced its policy decision. 

As widely anticipated, the BoJ decided to keep the short-term rate target in the range of 0.15%-0.25% after the conclusion of its two-day monetary policy review meeting on Friday. The Japanese BoJ remains cautious about hiking further as it could harm economic activity and hinder the demand-driven inflation that it tries to support. 

However, Japanese officials will meet again in October and December, leaving the door open for more rate hikes after recent economic data revealed that inflation in Japan has come hotter than estimated. The rising speculation that the Japanese central bank will raise the interest rate again by the end of this year provides some support to the Japanese Yen (JPY) and acts as a headwind for AUD/JPY.
 
Data released by the Japan Statistics Bureau showed on Friday that the National Consumer Price Index (CPI) rose 3.0% YoY in August, compared to 2.8% in July. Meanwhile, the core CPI, which excludes volatile fresh food costs, climbed 2.8% YoY in August versus 2.7% prior, matching the market expectation of 2.8%. 

On the Aussie front, Commonwealth Bank of Australia (CBA) analysts moved their expected timing of the first RBA rate cut from November 2024 to December 2024, with a 25 basis points (bps) rate cut expected. This, in turn, might weigh the Australian Dollar (AUD) against the JPY in the near term.