AUD/JPY climbs toward 98.50 as the Australian Dollar rebounds on foreign inflows

• AUD/JPY recovers daily losses amid foreign inflows, driven by rising RBA rate cut bets.
• The S&P/ASX 200 gains 0.86% to trade above 9,050, with gains in financial, real estate, and Gold stocks.
• BoJ board member Naoki Tamura said that the central bank should move interest rates closer to neutral levels.

AUD/JPY trades around 98.40 during the European hours on Thursday, after recovering its daily losses. The pair strengthens as the Australian Dollar (AUD) rebounds on prospects of foreign inflows, with gains in financial, real estate, and Gold stocks. The S&P/ASX 200 rises 0.86% to trade above 9,050 after weaker jobs data quickly boosted the chance of a November cut in the 3.65% cash rate to 76%, from under 50% prior.

The Australian Bureau of Statistics (ABS) reported on Thursday that the Employment Change came in at 14.9K in September, against the market expectations of 17K. The previous reading was -11.8K (revised from -5.4K). Meanwhile, the Unemployment Rate rose to 4.5%, jumping to a near four-year high. The figure came in above the market consensus and the previous 4.3%.

RBA Assistant Governor (Financial Markets) Christopher Kent spoke at the CFA Society Australia Investment Conference 2025 late Wednesday that financial conditions are less restrictive after recent rate cuts. Kent also added that the cash rate is now within a wide, uncertain neutral range, with the central bank reassessing its outlook with incoming data and risks.

The AUD/JPY cross may face challenges as the Japanese Yen (JPY) receives support against its peers, following the hawkish remarks from the Bank of Japan (BoJ) board member Naoki Tamura, who said on Thursday that the central bank should push the interest rates closer toward levels deemed neutral. However, Tamura declined to comment when asked whether to propose a rate hike at the October meeting.