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Japan Prime Minister Sanae Takaichi said on Tuesday that Japan is still halfway through in achieving sustained achievement of the Bank of Japan’s (BoJ) price target.

Australian Dollar (AUD) recovers its daily losses against the US Dollar (USD) on Tuesday, following the cautious remarks from the Reserve Bank of Australia (RBA) Governor Michele Bullock.

• Japan still halfway through in achieving sustained achievement of BOJ price target
• Expects BOJ to conduct appropriate monetary policy to sustainably hit price target
• Calls on BOJ to work closely with the government
• Abenomics has boosted GDP, created jobs
• Government will strategically deploy fiscal spending to boost household income, consumer sentiment

She’s not being all too subtle about what she wants from the BOJ. And that solidifies her position and stance as the fiscal dove that she is, in wanting to push for her more expansionary agenda.

This article was written by Justin Low at investinglive.com.

EUR/JPY continues its losses, trading around 177.20 during the Asian hours on Tuesday.

• We’re alert to outside commentary on our policy setting
• The board is not immune to outside commentary and will decide for themselves on policy
• Previous rate cuts are still feeding through to the economy
• Still watching for the impact, it is a balancing act
• We’ve already had three interest rate cuts, I know that mortgage holders want more
• But it’s also important to keep inflation under control, that’s also what impacts people’s living standards
• Policy is at the right spot at the moment

I don’t think there’s anything else that would be too notable from her remarks. She has made it pretty clear that their current stance is to leave policy on hold and to weigh up economic data in the months ahead before deciding next year. AUD/USD is just holding marginally lower by 0.1% on the day at 0.6532, with the more negative risk mood likely to be the bigger driver today.

This article was written by Justin Low at investinglive.com.

The AUD/NZD cross retreats a few pips from the vicinity of the 1.1500 mark, or the highest level since September 2022, touched during the Asian session, after the Reserve Bank of Australia (RBA) announced its policy decision.

Reserve Bank of Australia (RBA) Governor Michele Bullock is addressing the press conference, explaining the reason behind leaving the key interest rate unchanged at 3.6% in the November policy meeting.

• We discussed holding and outlook for policy, being cautious
• There are mixed signals on the tightness of financial conditions
• We still got a little bit of tightness that will take a little bit of heat out of the economy to bring inflation back down
• It’s possible that there’s no more rate cuts but also possible that there will be some more
• But as said before, we didn’t go up as high (on rates) so we don’t have to come down as far
• A rate hike was not discussed
• We have judged that things are restrictive but the closer we get to neutral, the less we know
• The board is definitely targeting 2.5% mark for inflation, “just below 3%” is not good enough
• It’s an open question about whether there are many more rate cuts to come
• We do not give forward guidance
• There is still much uncertainty on inflation
• We are watching things very carefully
• We think we are close to neutral and will be going meeting by meeting to see if whether outlook is still reasonable
• The board does not have a bias on monetary policy

Her remarks certainly don’t sound like they’re in a rush to be cutting again next. Barring any major surprises in the data, we shouldn’t see much of a change to the RBA outlook going into the turn of the year. The next key quarterly inflation report will only fall on 28 January 2026, so don’t expect the RBA to feel compelled to cut in December. As things stand, markets are pricing in ~92% odds of no change for that.

This article was written by Justin Low at investinglive.com.