USD/JPY swings as PBoC cuts rates; focus shifts to RBA decision

USD/JPY experienced volatility during Tuesday's Asian trading session, initially dipping to 138.20 before rebounding to 138.80. The early weakness was driven by the People's Bank of China's (PBoC) unexpected decision to cut its 1-year and 5-year Loan Prime Rates by 10 bps and 15 bps, respectively, in an effort to stimulate the slowing Chinese economy. However, the pair recovered as investors shifted their focus to the upcoming Reserve Bank of Australia (RBA) interest rate decision. The RBA is widely expected to maintain its cash rate at 3.50%, but the accompanying statement will be scrutinized for hints about future policy moves. Traders are also awaiting key US economic data later this week, including GDP and PCE inflation figures, which could influence the Federal Reserve's rate path and the dollar's strength. USD/JPY faces resistance at 139.00 (50-day moving average), with support at 137.80 (previous week's low).