AUD/USD, USD/JPY in Focus as IEA Plans Record Oil Reserve Release

The Asia-Pacific FX session saw multiple cross-currents as the IEA proposed its largest-ever release of oil reserves, a move aimed at calming energy markets amid geopolitical tensions following a suspected projectile strike on a container ship near the Strait of Hormuz. The Australian dollar faces significant repricing as Westpac raised its RBA peak rate forecast to 4.35%, now expecting rate hikes in both March and May, with multiple Australian bank analysts piling on to forecast a hike next week. This hawkish shift provides underlying support for AUD/USD. Meanwhile, USD/JPY remains under scrutiny as Japan's PPI data highlighted the compounding effects of a weak yen and oil price shocks on the inflation outlook, complicating the Bank of Japan's policy calculus. The PBOC set the USD/CNY central rate at 6.8917, signaling measured stability for the yuan. Goldman Sachs previewed February US CPI data suggesting a gradual inflation slowdown, though market consensus remains divided. Traders should monitor oil price volatility as a key risk factor across commodity-linked and energy-sensitive currency pairs in the near term.