Australian Dollar dives to six-month low vs Yen after Aussie CPI report, China PMIs

Source Fxstreet
  • AUD/JPY attracts heavy selling for the second straight day amid a combination of factors.
  • The AUD adds to the post-RBA losses following the release of rather unimpressive CPI data.
  • Intervention fears and BoJ rate hike bets underpin the JPY, further weighing on spot prices.

The AUD/JPY cross remains under heavy selling pressure for the second consecutive day, falling to a six-month low during the Asian session on Wednesday following the release of Australian consumer inflation figures. Bears now await a sustained break and acceptance below the 109.00 mark before positioning for any further losses.

The Australian Bureau of Statistics (ABS) reported that the headline Consumer Price Index (CPI) rose 0.4% in August, down from 1% recorded in the previous month. Meanwhile, the yearly rate accelerated from 3.5% in July to 4%, and the Trimmed Mean CPI held steady at 3.6% YoY during the reported month. Meanwhile, the data does little to revive bets for another interest rate hike by the Reserve Bank of Australia (RBA) against the backdrop of a mild-dovish tilt by Governor Bullock at the post-meeting press conference on Tuesday. This, in turn, undermines the Australian Dollar (AUD) and continues to exert downward pressure on the AUD/JPY cross.

Meanwhile, Aussie bulls shrugged off China's official PMIs, which showed that business activity in both manufacturing and services sectors recorded growth in September. The Japanese Yen (JPY), on the other hand, draws support from looming intervention fears and hawkish Bank of Japan (BoJ) bets. Japan's top currency diplomat Atsushi Mimura and Finance Minister Satsuki Katayama warned markets to take joint US-Japan messaging on FX depreciation seriously. This follows after US President Donald Trump conveyed his concerns about the JPY's depreciation to Prime Minister Sanae Takaichi on the sidelines of the United Nations General Assembly.

Furthermore, Minutes from the BoJ's July monetary policy meeting, released on Monday, revealed that policymakers debated the need for faster interest rate hikes amid growing concern over mounting inflation risks. This lifted expectations that the BoJ will hike again as soon as October or December. This, in turn, favors JPY bulls and backs the case for a further depreciating move for the AUD/JPY cross.

Economic Indicator

Consumer Price Index (YoY)

The Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a comprehensive basket of goods and services acquired by household consumers. The indicator is the primary measure of headline inflation after a new methodology was applied to transition from quarterly to monthly readings, applying to data from April 2024 onwards. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.

Read more.

Last release: Wed Sep 30, 2026 01:30

Frequency: Monthly

Actual: 4%

Consensus: 4%

Previous: 3.5%

Source: Australian Bureau of Statistics

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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