AUD/JPY pares gains near 94.50 as BOJ holds rates steady

• AUD/JPY trims part of intraday gain near 163.45 in Tuesday's Asian session. 
• The BoJ left policy settings unchanged at its June meeting on Tuesday.
• China's May Retail Sales grew at the fastest pace since December 2023. 

The AUD/JPY cross trims gains near 94.50 during the Asian trading hours on Tuesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) after the Bank of Japan (BoJ) interest rate decision. Investors will closely monitor the BoJ Press Conference later on Tuesday. 

The BoJ decided to keep the short-term interest rate target unchanged in the range of 0.40%- 0.50% at its June meeting on Tuesday. The decision aligned with the market expectations. The JPY trades higher in an immediate reaction to the rate decision. The Japanese central bank extended the pause in its rate-hiking cycle into the third consecutive policy meeting in a row after delivering a 25 basis points (bps) hike in January.

Additionally, the BoJ plans to reduce the pace at which it trims monthly bond purchases from the next fiscal year to quarterly reductions of ¥200 billion ($1.34 billion) from the current ¥400 billion. 

A stronger-than-expected China's Retail Sale provides some support to the China-proxy Aussie, as China is a major trading partner of Australia. China's Retail Sales in May grew at their fastest rate since late 2023, the National Bureau of Statistics (NBS) showed Monday. The country's Retail Sales rose 6.4% YoY in May versus 5.1% in April, stronger than the 5.0% expected.