On dovish BOJ bets, AUD/JPY seeks to retake a seven-year high above 97.00

The AUD/JPY currency pair is on course to retake its seven-year high of 96.90 after extending its five-day winning run. Due to the increasing potential of a wider policy divergence between the Reserve Bank of Australia (RBA) and the Bank of Japan, market participants have raised the risk barometer (BOJ).

Following the publication of the RBA's July monetary policy minutes, the Australian dollar is performing well against the Japanese yen. RBA officials offer harsh guidance in light of the intensifying price pressures in the Australian economy. While establishing price stability as soon as feasible is the RBA's goal.

RBA Governor Philip Lowe is now presenting at "The Australian Strategic Business Forum - Melbourne" on the topics of inflation, productivity, and the future of money. The comments RBA made According to Lowe, investors could expect higher inflation in June. The RBA will require more rate increases over the coming months in an effort to reduce pricing pressure.

This week, the Australian S&P PMI data will be the most important. The Manufacturing PMI may rise to 56.4 from its previous reading of 56.2. The Services PMI has increased from its previous reading of 52.6 to a current value of 55.

The headline-grabbing event on the Tokyo front will be the BOJ's announcement of its interest rate decision on Thursday. Given that the Bank of Japan is committed to increasing aggregate demand, Governor Haruhiko Kuroda is expected to make dovish comments. The central bank's goal is to keep inflation over 2%, and in order to do this, the wage price index must rise. This is because a higher inflation rate and lower pay levels might magnify the real income shock.