AUD/JPY Edges Higher as Australian Dollar Gains on Interest Rate Gap

The AUD/JPY currency pair traded near 113.85 during the early European session on Tuesday, with the Australian Dollar strengthening against the Japanese Yen. This movement is attributed to the interest rate differential between the Reserve Bank of Australia (RBA) and the Bank of Japan (BoJ), according to FX Street.

The pair had earlier hovered around 113.50 but found support above its 100-day simple moving average, reinforcing the recent upward trend. The widening gap in monetary policy stances continues to favor the Australian Dollar over the Yen in forex markets.

For Japanese investors, the persistent low-interest-rate environment maintained by the BoJ contrasts with tightening measures by other central banks, influencing cross-currency flows and impacting equity and FX market strategies.