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AUD/JPY reverses its daily losses on the improved ASX 200 Index and moves into the positive territory on Wednesday. The cross hovers around 97.60 during the European trading hours. During the Asian hours, the AUD faced downward pressure as the S&P/ASX 200 Index encountered challenges, reflecting a sell-off in technology stocks on Wall Street and lower mining stocks.

Despite softer-than-expected Gross Domestic Product (GDP) (Q4), the Australian Dollar remained relatively unaffected. The GDP grew by 0.2% quarter-on-quarter in the fourth quarter of 2023, slightly below market expectations of no change at 0.3%. However, on a year-on-year basis, GDP expanded by 1.5%, surpassing the expected 1.4%, albeit falling short of the previous growth of 2.1%.

The AUD/JPY cross could encounter resistance following reports from Jiji Press suggesting that attendees of the upcoming Bank of Japan (BoJ) policy meeting on March 19 may advocate for "lifting negative interest rates." However, BoJ Governor Kazuo Ueda expressed skepticism on Friday regarding the sustainability of Japanese inflation reaching the 2% target. With the unexpected possibility of a recession, the BoJ may delay its plans for monetary policy tightening.

According to Reuters, an unnamed source indicates that the BoJ is likely to maintain its forecast for a moderate economic recovery but may revise its assessment of consumption and factory output at the March meeting.

Tuesday’s data showed a rebound in the Tokyo Consumer Price Index (CPI) from a 22-month low in February. This development has reignited discussions about the possibility of the Bank of Japan (BoJ) exiting the negative interest rates regime, which, in turn, has bolstered the Japanese Yen.

AUD/JPY

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