Search ForexCrunch
  • AUD/JPY jumped from 66.60 to session highs above 66.80 after RBA’s rate decision. 
  • RBA keeps rates unchanged at 0.25%, as expected. 
  • The central bank said the size of bond purchases and their frequency may be reduced if conditions improve. 

The bid tone around the Aussie dollar strengthened, pushing the AUD/JPY to a fresh session high above 66.80 after the Reserve Bank of Australia’s (RBA) status quo policy decision.

The central bank kept the benchmark interest rate unchanged at 0.25%, as expected and retained the yield curve control program launched last month.

The RBA said that it will do what is necessary to keep the three-year government bond yield at the target of 0.25% and warned of a very large economic contraction in the second quarter that could push the jobless rate to the highest level for many years. The central bank achieved the YCC target last week and since then has tapered the bond purchases to $2 billion per day. 

The bank added that the size and the frequency of the bond purchases will likely be reduced if conditions improve. That likely put a bid under the Aussie dollar, lifting the AUD/JPY higher. The Aussie dollar ignored the dismal domestic data released early Tuesday, which showed a 10 percent plunge in the job openings in March. 

The pair could gain further if the equity markets extend Monday’s sharp rally, which saw major US indices eke out 7% gains. 

Technical levels