AUD/JPY jumps to near 96.80 as Yen underperforms ahead of Japan’s elections

AUD/JPY advances to near 96.80 as uncertainty surrounding Japan’s elections has weighed on the Japanese Yen.
Inflation in Japan grew at a moderate pace in June.
Weak Australian employment data paves the way for interest rate cuts by the RBA.

The AUD/JPY pair climbs to near 96.80 during the European trading session on Friday. The cross demonstrates strength as the Japanese Yen (JPY) underperforms across the board amid uncertainty surrounding elections in Japan on Sunday.

Japanese Yen PRICE Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.24%	-0.12%	0.16%	-0.09%	-0.27%	-0.28%	-0.26%
EUR	0.24%		0.14%	0.38%	0.15%	-0.03%	-0.15%	-0.01%
GBP	0.12%	-0.14%		0.26%	0.03%	-0.15%	-0.24%	-0.13%
JPY	-0.16%	-0.38%	-0.26%		-0.23%	-0.42%	-0.53%	-0.30%
CAD	0.09%	-0.15%	-0.03%	0.23%		-0.21%	-0.27%	-0.16%
AUD	0.27%	0.03%	0.15%	0.42%	0.21%		-0.08%	0.03%
NZD	0.28%	0.15%	0.24%	0.53%	0.27%	0.08%		0.11%
CHF	0.26%	0.01%	0.13%	0.30%	0.16%	-0.03%	-0.11%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Market sentiment has been spooked towards the Japanese currency amid fears that Japan’s Liberal Democratic Party (LDP) could lose its majority, a scenario that will bring political uncertainty into the economy.

This comes at a time when the United States (US) has imposed 25% tariffs on imports from the Asia-Pacific nation, which are separate from sectoral levies.

Additionally, an expected slowdown in Japan’s National Consumer Price Index (CPI) growth for June has also weighed on the Japanese Yen. The inflation report showed earlier in the day that the National CPI decelerated to 3.3% from 3.5% in May. National CPI excluding Fresh Food, which is closely tracked by Bank of Japan (BoJ) officials, grew at a slower pace of 3.3%, as expected, against the prior reading of 3.7%.

Moderate Japan’s inflation growth could derail BoJ’s ambitions of raising interest rates again this year.

Meanwhile, the Australian Dollar (AUD) trades firmly even as Australian labor market conditions have cooled down. The employment report showed on Thursday that the Unemployment Rate came in higher at 4.3%, against expectations and the prior reading of 4.1%. The number of fresh workers added in June was 2K, while economists anticipated fresh hiring of 20K job-seekers. In May, the Australian labor force was reduced by 1.1K.

Cooling labor market expectations have prompted traders to raise bets supporting interest rate cuts by the Reserve Bank of Australia (RBA) in the policy meeting in August.

Economic Indicator

National CPI ex Fresh Food (YoY)

Japan’s National Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households nationwide excluding fresh food, whose prices often fluctuate depending on the weather. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.