AUD/JPY LOSES GROUND AMID SUSPECTED INTERVENTION BY JAPANESE AUTHORITIES

• AUD/JPY depreciated as JPY continued to gain ground amid possible market intervention by Japanese authorities.
• Japan's vice finance minister for international affairs, Masato Kanda declined to comment on whether Japan had intervened in the market.
• Australian Composite PMI declined in April, indicating a slower pace of growth in private sector output.

AUD/JPY declined as the Japanese Yen (JPY) strengthened on Friday, following a rally on Thursday attributed to potential Japanese government intervention, marking the second such incident this week, according to a Reuters report. Masato Kanda, Japan's vice finance minister for international affairs, declined to comment on whether Japan had intervened in the market. It is worth noting that Japanese banks will be closed due to Greenery Day on Friday.

On Thursday, the Bank of Japan (BoJ) released Minutes from the March meeting with insights into the monetary policy outlook. One member noted that the economy's reaction to a short-term rate increase to approximately 0.1% is expected to be minimal. Additionally, several members expressed the opinion that market forces should primarily determine long-term rates.

The Australian Dollar (AUD) may strengthen due to the hawkish sentiment surrounding the Reserve Bank of Australia (RBA). It is widely anticipated that the RBA will maintain its key policy rate at 4.35% for a fourth consecutive meeting on Tuesday, and likely until the end of September, according to a Reuters poll of economists. These economists forecast only one interest rate cut this year. This shift in expectations, from two 25 basis point cuts in an April survey, follows news that inflation declined less than expected in the last quarter and the labor market remains tight.