AUD/JPY trades below 91.00 as Japan’s core inflation rises in March

• AUD/JPY stays subdued amid thin trading, as Australian markets remain closed for the Good Friday holiday.

• Australia’s March labor data has intensified speculation of a potential 25 basis point rate cut by the RBA in May.

• In Japan, the “core-core” CPI, , which excludes fresh food and energy—rose to 2.9% in March from 2.6% in February.

AUD/JPY retraces its recent gains from the previous session, trading around 90.80 during the European hours on Friday. The currency cross remains under pressure as the Australian Dollar (AUD) weakens in light trading, with local markets closed for the Good Friday holiday.

Minutes from the Reserve Bank of Australia's (RBA) March 31–April 1 meeting highlighted uncertainty around the timing of the next interest rate move. While the Board viewed the May meeting as an appropriate time to reassess policy, it emphasized that no decision had been pre-committed. Risks to both economic growth and inflation remain balanced to the upside and downside.

Australia’s March labor data showed the unemployment rate steady at 4.1%, but job gains missed expectations. This has fueled speculation of a potential 25 basis point rate cut in May, with some traders even considering a 50 basis point move amid growing concerns of a global slowdown tied to escalating tariffs.

In Japan, the National Consumer Price Index (CPI) rose 3.6% YoY in March, marking three consecutive years above the Bank of Japan’s (BoJ) 2% inflation target, though slightly below February’s 3.7%. The “core-core” CPI—excluding fresh food and energy—accelerated to 2.9% from 2.6%, while core inflation (excluding only fresh food) rose to 3.2%, in line with forecasts.

These inflation readings come ahead of the BoJ’s May 1 policy meeting, where the central bank is expected to maintain rates at 0.5% and potentially revise down its growth outlook as rising global trade tensions weigh on sentiment.