AUD/JPY strengthens above 98.00 as Takaichi poised to become first female Prime Minister

• AUD/JPY gains traction to near 98.10 in Monday's Asian session. 
• Sanae Takaichi is almost certain to become Japan's first female Prime Minister on Tuesday. 
• China's Q3 GDP grew 4.8% YoY, as expected. 

The AUD/JPY cross gains ground to around 98.10 during the Asian trading hours on Monday. The Japanese Yen (JPY) weakens against Australian Dollar (AUD) amid renewed concerns about Japan's fiscal health. The preliminary reading of Australia S&P Global Purchasing Managers Index (PMI) reports for October will be released later on Friday.  

Reuters repored ealry Monday that the ruling Liberal Democratic Party (LDP) and the Japan Innovation Party (JIP) have agreed to form a coalition government. A parliamentary vote to choose a prime minister is set for Tuesday. 

Sanae Takaichi is expected to become Japan's next Prime Minister after reportedly securing crucial political backing for the top job, raising market expectations for big spending and loose monetary policy. Traders anticipate that the Bank of Japan (BoJ) would further delay raising interest rates, which undermines the JPY and create a tailwind for the cross. 

Data released by the National Bureau of Statistics (NBS) on Monday showed that China's economy grew at an annual rate of 4.8% in the third quarter (Q3) of 2025, compared to a 5.2% expansion in Q2. The figure came in line with the market consensus. 

On a quarterly basis, the Chinese Gross Domestic Product (GDP) rate rose 1.1% in Q3 versus 1.1% prior, beating the estimation of 0.8%. Meanwhile, China's annual June Retail Sales climbed by 3.0% versus 2.9% expected and 3.4% prior, while Industrial Production came in at 6.5% versus 5.0% estimate and 5.2% prior.

China's economic growth slowed to the weakest pace in a year in Q3 as a property crisis and trade tensions hurt demand. This, in turn, might cap the upside for the China-proxy Aussie in the near term, as China is a major trading partner for Australia.