AUD/JPY extends its gains for the third consecutive day, trading near 101.60 during European hours on Wednesday. The Japanese Yen (JPY) is under heavy selling pressure due to growing concerns over political instability, which further clouds the outlook for the Bank of Japan’s (BoJ) monetary policy.In Japan, recent polls indicate the ruling coalition led by the Liberal Democratic Party (LDP) may lose its majority in the general election this weekend, which could jeopardize Prime Minister Shigeru Ishiba’s position or push the party to seek an additional coalition partner to remain in power, per Reuters.In its October World Economic Outlook (WEO) report, the IMF downgraded Japan’s economic growth forecast to 0.3% for this year, down from 1.7% in 2023. The projection was revised downward by 0.4% compared to the July . Looking ahead, the IMF expects the economy to grow by 1.1% in 2025, driven by stronger private consumption as real wage growth picks up.Furthermore, traders will likely observe the speech of the Bank of Japan Governor Kazuo at the IMF-hosted “Governors Talk” session scheduled later in the North American session.The Australian Dollar (AUD) receives support as upbeat employment data has strengthened the hawkish sentiment surrounding the Reserve Bank of Australia (RBA). Further support for came from China’s recent rate cuts, as China remains Australia’s largest trading partner.On Monday, RBA Deputy Governor Andrew Hauser expressed some surprise at the robust employment growth. He pointed out that the labor participation rate is notably high and clarified that while the relies on data for its decisions, it is not overly fixated on it. More By This Author:USD/CAD Maintains Position Above 1.3800 Ahead Of The BoC Policy Decision USD/CHF Depreciates To Near 0.8650, Downside Risk Seems Restrained Due To Higher US Yields Australian Dollar Depreciates As US Dollar Remains Solid Following A Surge In US Yields
AUD/JPY Moves Above 101.50 Due To Growing Doubts Over BoJ Policy Outlook
