AUD/JPY jumps to near 98.00 as RBA hold interest rates steady at 3.6% as expected

• AUD/JPY gains sharply to near 98.00 as the RBA has kept its OCR steady at 3.6%, as expected.
• The RBA stated that inflation in the third quarter could be higher than what they had anticipated earlier.
• BoJ members signaled no urgency for interest rate hikes.

The AUD/JPY pair climbs to near 98.00 after the announcement from the Reserve Bank of Australia (RBA) that members have decided to hold its Official Cash Rate (OCR) steady at 3.6%. The RBA was expected to maintain the status quo as inflationary pressures in the Australian economy have proven to be sticky in the last few months.

In August, the Monthly Consumer Price Index (CPI) grew at an annual pace of 3.0%, faster than expectations of 2.9% and the prior reading of 2.8%.

Meanwhile, the RBA has also warned of upside inflation risks in its monetary policy statement. "Recent indicators suggest inflation in the September quarter may be higher than expected at the time of August," the RBA said.

Going forward, the major trigger for the Australian Dollar (AUD) will be the Trade Balance data for August, which will be published on Thursday.

Though investors have underpinned the Australian Dollar against the Japanese Yen (JPY), the latter is outperforming its other peers, even as the Bank of Japan's (BoJ) Summary of Opinions (SOP) has signaled that officials don't see any urgency for interest rate hikes.

BoJ members have stated that the central bank needs more time to assess the impact of the US tariffs-driven trade war risk on the Japanese economy.