AUD/JPY holds positive ground above 94.00 amid improved risk sentiment 

• AUD/JPY gathers strength to near 94.30 in Wednesday's early European session, up 0.33% on the day. 
• Receding safe-haven demand continues to weigh on the Japanese Yen. 
• Australia's monthly CPI rose by 2.1% YoY in May, softer than expected. 

The AUD/JPY pair attracts some buyers to around 94.30 during the early European session on Wednesday. The Japanese Yen (JPY) softens against the Euro (EUR) due to growing optimism that a ceasefire between Israel and Iran will hold after it was touted by US President Donald Trump. 

The Israel-Iran ceasefire went into force on Tuesday and seems to be holding for the time being, despite an Israeli attack on Tehran and an Iranian missile strike. The de-escalation of tensions in the Middle East could undermine the JPY and create a tailwind for the cross in the near term. 

However, Israeli Prime Minister Benjamin Netanyahu warned that Israel "will strike again" if Iran "thinks of rebuilding" its nuclear program. Any signs of renewed escalation could boost the safe-haven flows and benefit the JPY. 

Data released by the Australian Bureau of Statistics (ABS) on Wednesday showed that the country's monthly Consumer Price Index (CPI) rose by 2.1% YoY in May versus 2.4% prior. This figure came in softer than the expectation of 2.3% growth in the reported period.  

Softer Australian CPI inflation and weaker Gross Domestic Product (GDP) reports reinforce expectations of the Reserve Bank of Australia's (RBA) rate cut in July. This, in turn, might drag the Aussie lower against the JPY. Financial markets have priced in nearly an 80% chance of a 25 basis points (bps) rate cut by the RBA in the July meeting.