AUD/JPY holds positive ground above 98.00 despite BoJ rate hike

• AUD/JPY trades in positive territory around 98.20 in Friday's Asian session, up 0.22% on the day. 
• BoJ hiked the interest rate to 0.50% in the January meeting, as expected.
• Trump said he would rather not use tariffs against China. 

The AUD/JPY cross remains firm near 98.20 during the Asian trading hours on Friday. However, the upside of the cross might be limited amid the stronger Japanese Yen (JPY) after the Bank of Japan's (BoJ) interest rate decision. 

As widely expected, the BoJ decided to hike the short-term rate target by 25 basis points (bps) from 0.15%- 0.25% to 0.40%- 0.50% at its January meeting on Friday. The Japanese central bank raised the interest rate to its highest level since 2008 after having held steady for three straight meetings. The JPY pares losses in an immediate reaction to the BoJ rate decision. 

Data released by the Japan Statistics Bureau on Friday showed that the country's National Consumer Price Index (CPI) climbed 3.6% YoY in December, compared to 2.9% in the previous reading.

Furthermore, the National CPI ex Fresh food came in at 3.0% YoY in December versus 2.7% prior, in line with the market consensus of 3.0%. Finally, CPI ex Fresh Food, Energy rose 2.4% YoY in December, compared to the previous reading of 2.4% (revised from 2.7%).

On the other hand, US President Donald Trump said Friday that he would rather not use tariffs against China but called tariffs a "tremendous power." This positive development could provide some support to the China-proxy Aussie, as China is a major trading partner to Australia.