AUD/JPY Slips as BOJ's Ueda Keeps Rate Hike Door Open

The Japanese Yen (JPY) found modest support on Monday, causing AUD/JPY to shed 0.05% to trade near 105.00, following hawkish commentary from Bank of Japan Governor Kazuo Ueda.

Speaking to markets, Ueda reiterated the central bank's commitment to normalization, stating the BOJ would hike interest rates “if economic and inflation trends align with our projections.”

This conditional guidance stands in contrast to the easing bias accumulating in other G10 economies. While the market reaction was muted, the comments serve as a reminder that the carry trade remains vulnerable to BOJ policy shifts. Traders are now pricing in the probability of a hike later this year, depending on wage growth data and the sustainability of Japan's inflation above the 2% target.