AUD/JPY jumps to near 94.00 as safe-haven assets lose steam, BoJ policy in focus

• AUD/JPY gains sharply to near 94.00 as the safe-haven demand of the Japanese Yen diminishes.

• The BoJ is expected to hold interest rates steady at 0.5%.

• This week, investors will focus on the Aussie employment data for May.

The AUD/JPY pair climbs to near 94.00 during European trading hours on Monday. The cross moves sharply higher as demand for safe-haven assets, such as the Japanese Yen (JPY) has diminished, while tensions between Israel and Iran have escalated.

S&P 500 futures have gained significantly during the European trading session, exhibiting an increase in the risk-appetite of investors. Tensions between Israel and Iran have escalated as the former threatens to accelerate attacks if Tehran doesn’t stop launching missile attacks.

Going forward, the major trigger for the Japanese Yen will be the Bank of Japan’s (BoJ) monetary policy announcement on Tuesday. The BoJ is almost certain to keep interest rates steady at 0.5%. Investors will closely monitor comments from BoJ Governor Kazuo Ueda at the press conference, following the monetary policy decision, to get about cues about when the central bank could hike interest rates again.

Earlier this month, Kazuo Ueda stated that interest rate hikes would become appropriate once officials get convinced that the “economy and inflation will re-accelerate after a period of economic sluggishness”.

Meanwhile, the Australian Dollar (AUD) outperforms its peers, except European currencies. This week, investors will focus on the Australian employment data for May, which will be released on Thursday. The Unemployment Rate is expected to remain steady at 4.1%.